On November 11, the President signed the new version of the Central Bank Bill into Law with immediate effect. The new version of the Law was developed taking into account the Central Bank's functions to ensure and maintain the stability of prices, the sustainability of the banking system and payment systems, the Central Bank said.
The Law consists of 11 chapters and 72 articles. The new edition was developed jointly with experts from the International Monetary Fund (IMF) and included “best practices and experience of foreign central banks”, in particular, that of Russia, Switzerland, Poland and Georgia.
According to the Law, the functions of the Central Bank are to develop and implement effective monetary policies, monitor, analyze and project inflation, generate and publish banking and monetary information and statistics on the external activities, including Uzbekistan’s balance of payments, international investment position, and external debt and reserve assets.
The board shall determine and approve the main axes of monetary policy for the next year, including the parameters for money supply and withdrawal, interest rates, including basic rate, the size of mandatory reserve sizes, and a list of types collateral for loans issued and shall determine the permissible values of prudential standards for systemically important banks and other powers.
In addition, the Law provides for foreign exchange interventions in the domestic foreign exchange market only to the extent that they can eliminate excessive currency fluctuations provided that the free-floating exchange rate regime is maintained.
The Law provides for the creation of an internal audit authority as an internal audit body, whose responsibilities include checking the economic and financial activities of structural units and subordinate organizations of the Central Bank, as well as conducting annual audit by audit organizations in line with international audit standards.
In accordance with the IMF recommendations, the Central Bank’s list of powers includes motivated judgment in licensing, regulating and supervising the activities of banks and non-bank credit organizations and organizations for refinancing mortgages and banking groups, as well as activities in the spot and forward financial markets with an expanded line of market instruments, currencies and precious metals.