A meeting was held at the Central Bank of the Republic of Uzbekistan to discuss the outcomes of the International Monetary Fund (IMF) technical assistance mission on the development of the government securities market.
The discussions focused on the prospects for introducing floating-rate government securities linked to the Uzbekistan Overnight Index Average (UZONIA), the benchmark interest rate of the domestic interbank money market.
IMF experts noted that the prevailing market conditions, characterised by declining inflation and ample liquidity in the banking system, could provide a favourable basis for the gradual introduction of such instruments on a pilot basis, initially with relatively small issuance volumes.
According to the experts, UZONIA-linked floating-rate government securities could enable banks to access more stable, longer-term funding, reduce their reliance on short term financing, and improve the management of funding costs. Furthermore, the development of these instruments could strengthen the transmission of monetary policy decisions to deposit and lending rates.
The discussions also covered the potential development of UZONIA-linked deposit and lending products, interest rate swaps, and other financial instruments that would allow banks and other market participants to better manage their exposure to interest rate fluctuations.
At the conclusion of the mission, IMF experts reaffirmed their commitment to continued cooperation and joint research with the Central Bank in support of further developing the government securities market and strengthening its depth and resilience.
