Uzbekistan's Transition to Inflation Targeting

Moayad Al Rasasi and Ezequiel Cabezon

No 2022/229, IMF Working Papers from International Monetary Fund

Abstract: Uzbekistan has significantly improved its monetary policy framework during 2017-21. Nevertheless, the transition to inflation targeting is challenging as the country is going through a period of deep structural reforms. Therefore, the Central Bank of Uzbekistan (CBU) will have to monitor structural reforms and calibrate monetary policy accordingly. This paper identifies institutional and structural gaps, and assesses the effectiveness of monetary policy transmission. Institutional gaps are assessed using institutional indexes while transmission is assessed using VARs. It concludes that in the coming years, reforms will need to continue, to further improve the CBU’s governance and independence, develop financial markets, but most of all to reduce the still large footprint of the state in the financial sector as well as in the overall economy.

Keywords: Uzbekistan; Inflation targeting; Monetary policy; post inflation targeting implementation; monetary policy outcome; monetary policy transmission; inflation targeting condition; transition to inflation targeting; transmission mechanism; Central bank policy rate; Inflation; Dollarization; Currency markets; Global; Central Asia and the Caucasus (search for similar items in EconPapers)
Pages: 27
Date: 2022-11-18
New Economics Papers: this item is included in nep-cba, nep-cis, nep-mon and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2022/229

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