Uzbekistan’s banking system recorded a significant increase in liquidity in the fourth quarter of 2025, with average liquidity reaching UZS 32 trillion ($2.5bn), up 49% compared with UZS 21.3 trillion ($1.66bn) in the third quarter, according to the Central Bank’s money market and liquidity report.
The liquidity surplus rose steadily during the quarter, increasing from UZS 25 trillion ($1.95bn) in October to UZS 28.7 trillion ($2.24bn) in November, before reaching UZS 41.7 trillion ($3.25bn) in December.
The Central Bank said the dynamics were partly linked to changes in reserve requirements introduced on October 1, when the mandatory reserve base coverage increased from 10% to 15%. To soften the impact, the reserve ratio on foreign-currency liabilities was reduced from 10.5% to 9.5%.
As a result, the banking system’s average reserve requirement rose slightly to UZS 16.6 trillion ($1.29bn) during the quarter, up about UZS 500bn ($39mn) compared with the previous quarter.
Banks also accumulated around UZS 2 trillion ($156mn) in additional liquidity on correspondent accounts, helping ensure the continuity of payment operations.
However, seasonal factors — particularly higher demand for cash in circulation — reduced banking system liquidity by about UZS 3 trillion ($234mn) during the quarter.
Interbank money market activity
Activity in the interbank money market reached UZS 183.6 trillion ($14.3bn) in the fourth quarter, equivalent to 33.6% of quarterly GDP.
Most transactions were conducted through repurchase (REPO) operations, which accounted for 70% of the market with a volume of UZS 129 trillion ($10.05bn). Interbank deposit operations totaled UZS 54.3 trillion ($4.23bn).
Short-term transactions dominated the market, with overnight operations accounting for 86% of total activity.
The Central Bank noted that although overall activity in the interbank market declined slightly compared with the previous quarter, the scale of transactions and number of participants indicate continued development of liquidity redistribution mechanisms and improved liquidity management across the banking sector.
Interest rate stability
During the quarter, the UZONIA benchmark interest rate averaged around 13.9%, reflecting relatively stable money market conditions.
To regulate liquidity and prevent sharp interest rate fluctuations amid the surplus environment, the Central Bank actively used deposit and liquidity absorption operations.
Demand for overnight deposit operations rose significantly, increasing from UZS 2.7 trillion ($210mn) in October to UZS 6.4 trillion ($499mn) in December.
Central Bank’s average net position in monetary policy operations with commercial banks reached about UZS 30 trillion ($2.34bn) during the quarter, reflecting active liquidity management.
Looking ahead, the regulator expects seasonal declines in budget operations, stronger demand for foreign currency and lower demand for cash to moderately reduce liquidity surplus in the first quarter of 2026.
