Why is this important
A sharp increase in the money supply can increase inflationary pressure. The increase in cash in circulation is a signal of changes in the behavior of the population and the demand for banking services.
A change in the structure of liquidity may be related to the strengthening of the sum and a change in sentiment in the foreign exchange market.
Key facts
- The total volume of money supply in the economy as of September 1 is 324.35 trillion soums.
- In August, it increased by 8.6 trillion soums.
- The increase in national currency was 9.5 trillion soums, while deposits in foreign currency decreased by 893 billion soums.
- The volume of cash in circulation increased by 1.9 trillion soums and reached 61.7 trillion soums.
Context
- The strengthening of the soum against the dollar since the beginning of the year was about 3.4% — in August alone, the exchange rate decreased by 109 soums.
- The growth of the money supply coincided with the expansion of consumer activity and preparations for the academic year.
- The International Monetary Fund previously recommended that Uzbekistan allow exchange rate fluctuations and control the growth of the monetary base to reduce inflationary risks.
