Monetary policy as a tool of macroeconomic regulation

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MONETARY POLICY AS A TOOL OF MACROECONOMIC REGULATION 
Tillabayeva M.K.1, Talibov I.S.2 
Tillaboev M.K., Tolibov I.S. MONETARY POLICY AS A TOOL OF MACROECONOMIC REGULATION 
1Tillaboeva Malikakhon Kodirjon kizi – listener, 
Banking and Finance Academy of the Republic of Uzbekistan, Tashkent; 
2 Talibov Islombek Shukhratjon ugli - Student, 
Department of Economics, Faculty of Management in Production, 
Ferghana Polytechnic Institute, 
Ferghana, 
Republic of Uzbekistan 
 
Abstract:
 the article analyzes the monetary policy of the Central Bank of the Republic of Uzbekistan. The authors have proved 
that monetary policy is an instrument of macroeconomic stabilization of the national economy of Uzbekistan. 
Keywords:
 bank, banking policy, monetary policy, economy of Uzbekistan, macroeconomic stability 
 
The most important direction of the economic policy of the state is traditionally the state 
monetary policy [1]. Its main goal is to ensure price stability, effective employment and the growth of the 
real volume of the gross national product. This goal is achieved through monetary policy measures, the 
implementation of which is a long process [2]. 
Monetary policy is a type of economic policy pursued by the Central Bank (CB) of a country in 
order to regulate monetary relations and ensure a more efficient distribution of the money supply. 
Monetary policy itself has a number of ultimate goals, benchmarks that the Central Bank must adhere to 
in order to achieve the planned results. First of all, it is ensuring economic growth, which will further 
solve the problem of reducing the welfare of the nation and insufficiently developed national security. 
The next goal of monetary policy should be called the formation of full employment of all resources: 
labor, land, capital, investment, etc. Thanks to this, it will be possible to achieve relative price stability. 
Today, in the labor market, real estate and other types of markets, we observe an imbalance in supply and 
demand, which is the root cause of the abrupt dynamics of pricing [3]. Finally, the last goal of the Central 
Bank's monetary policy can be called the achievement of a stable balance of payments. 
Ultimately, monetary policy should be understood as a set of strategic and tactical goals of the 
country's economic development, implemented through the regulation of the banking sector by 
influencing the monetary and credit activity of market entities. The ongoing serious changes in the global 
financial system, as well as the measures taken in our country to reform the national economy on a large 
scale, require new approaches and principles in the formation and practical implementation of monetary 
policy and further development of the banking system. 
Objectively, it should be recognized that today not all the potential of monetary policy and banking 
regulation is involved in practice, the underdevelopment of transmission mechanisms that ensure proper 
operation and effectiveness of monetary instruments complicates the achievement of goals [4, 5]. 
Imperfection of the existing mechanisms of influence of the Central Bank of the Republic of 
Uzbekistan on the quality of management and risk management of commercial banks, the continuing 
practice of administrative interference in banking activities, especially the creation by commercial banks 
of enterprises that are not typical of their activities, as well as the encumbrance of non-core functions 
make it difficult to conduct effective banking supervision [6]. 
According to the Decree of the President of the Republic "On measures to radically improve the 
activities of the Central Bank of the Republic of Uzbekistan", as well as in accordance with the Action 
Strategy for the five priority Areas of Development of the Republic of Uzbekistan in 2017-2021, in order 
to ensure further improvement of monetary policy, effective supervision of the stable functioning of the 
banking system as a whole and the activities of the Central Bank: Consider the strategic targets of the 
Central Bank's activities to ensure: price stability; stability and development of the banking system; 
stability and development of the payment system. 

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At the same time, the priority areas of the Central Bank's activities within the framework of the ongoing 
reforms have been identified: 
o
cardinal improvement of monetary policy and its instruments with the gradual application of the 
principles and mechanisms of inflation targeting; 
o
development of statistical, analytical and research base; 
o
improving the mechanisms of regulation and supervision of the banking system; 
o
development of the banking system as an important component of ensuring stable economic 
growth in the medium and long term; 
o
further development of the payment system, including the organization of effective interaction of 
information systems of commercial banks in the provision of remote banking services; 
o
implementation of comprehensive measures to strengthen the financial stability of non-bank 
credit institutions, as well as strengthen supervision over their activities; 
o
ensuring the protection of the rights and legitimate interests of consumers of banking services, 
increasing financial accessibility and the level of financial literacy of the population and business 
entities [6]. 
The Central Bank is constantly improving the procedure for depositing the main reserves, based 
on the regulation of the money supply and ensuring the stability of the liquid funds of the banking system. 
The Central Bank provides for a number of measures, an example is the establishment of a uniform rate 
of mandatory reserve requirements for deposits in national and foreign currencies [7]. The 
implementation of these measures by the Central Bank will improve the methods of effective 
management of assets and liabilities of the banking system in national and foreign currency and improve 
the conditions for the issuance of loans by commercial banks [8]. 
In conclusion, I would like to note that without mastering the methods of central banks, monetary policy 
instruments, it is impossible to operate an effective market mechanism. World experience shows that 
monetary policy plays an important role in achieving economic growth, as well as in ensuring economic 
growth and macroeconomic stability. By ensuring price stability, monetary policy creates conditions 
conducive to economic growth, strengthening macroeconomic and financial stability in the country.