Central Bank of the Republic of Uzbekistan holds seminar on market based pricing and UZONIA linked interest rate risk management

The Central Bank of the Republic of Uzbekistan hosted a practical seminar during a regular meeting of the Money Market Working Group, with experts from the European Bank for Reconstruction and Development and treasury representatives from commercial banks. The session focused on how banks price financial instruments, assess interest rate expectations and use derivatives to manage interest rate and foreign exchange risks. In substance, the event centered on strengthening asset and liability management, deepening the money market and improving monetary policy transmission through more market-based pricing practices. The seminar highlighted that banks should reflect not only current market rates when pricing loans, deposits and other instruments, but also future rate expectations, risk premia, liquidity conditions and capital costs. Discussion covered practical methods for estimating interest rate expectations, including use of the yield curve, expected policy rate paths and present value calculations, with the aim of improving product pricing and managing maturity and repricing mismatches. It also reviewed how interest rate swaps and other derivatives can reduce risks linked to fixed-rate assets or liabilities, stabilize net interest income and support longer-term financing, while emphasizing the role of benchmark rates such as UZONIA in developing floating-rate loans, deposits and bonds in national currency. The central bank said it will continue to hold similar technical seminars and practical dialogues with market participants on a systematic basis, while pursuing further money market development, wider use of benchmark rates and stronger bank capacity to manage interest rate risks.