Compulsory reserve instrument and foreign currency interest policy of commercial banks in Uzbekistan

Abstract

This article analyzes the mandatory reserve instrument from monetary policy instruments. Based on the selected indicators, the SVAR model was formed on the impact of the mandatory reserve instrument on the interest policy of commercial banks. According to the results of the model, the mandatory reserve percentage for foreign currency deposits of legal entities has a strong effect on the percentage of short-term foreign currency deposits of the population in commercial banks. The statistical significance of the effect of this mandatory reserve norm on the percentage of short-term deposits of legal entities in commercial banks and on the percentage of loans in foreign currency allocated to them is low. Also, the impact of the devaluation of the national currency on the interest policy of commercial banks was insignificant. The reason for this is that commercial banks have not combined the constant devaluation indicator with the interest policy. On the contrary, the inflation rate had a high impact on the interest policy of commercial banks. Apart from the influence of the above endogenous indicators on the interest policy of commercial banks, the autocorrection of interest rates in commercial banks is becoming stronger.