Uzbekistan: Bank rate market goes into antiphase

The financial system of Uzbekistan shows a noticeable discrepancy in the dynamics of key instruments: the yield on deposits decreases for the third consecutive month, while the cost of credit resources not only does not stop growth, but also reaches new local highs. This situation raises more and more questions among market participants and analysts, especially against the background of the continuing volatility of the external economic environment.

According to the latest data from the Central Bank, the weighted average rate on time deposits in national currency in June was 19.7%, down 0.1 percentage points compared to May. At the same time, the value remains above the April level, but there is a structural stratification within the segment. Short — term deposits (up to one year) rose in price to 18.8% (+0.4 p.p.), while long-term deposits lost their yield, falling to 20% (-0.3 p. p.).

Deposits of individuals showed the greatest sensitivity to changes in interest rates. The average rate on household deposits in June was 21.4%, which reflects a steady downward trend. Moreover, a decrease in long-term deposits — up to 21.5% - was recorded for the first time since February 2024, which may signal a revision of bank priorities in attracting long-term resources.

In the corporate segment, average rates remained at 17.9%, reaching the highest level in the last year. Short-term corporate deposits rose in price to 18% (+0.3 p.p.), while the yield on long-term deposits decreased to 17.8% (-0.3 p. p.). This indicates an increased business demand for flexible financial instruments and short planning horizons in the face of economic uncertainty.

There are also multidirectional movements in the foreign exchange deposit market. Overall, the average yield was 4.6%, an increase of 0.1 percentage points compared to May. For deposits of individuals, the rate reached 4.8%, while deposits of legal entities showed a decrease to 4.2%.

Against the background of falling returns on deposits, the lending market is showing a reverse trend. After a short-term decline at the beginning of the year, interest rates on loans denominated in the national currency began to rise again. In June, the average loan rate reached 23.2%, repeating the February level.

Particularly sharp growth is observed in the retail lending segment. In two months, the average interest rate on loans for households has increased by more than 1 percentage point. From the April low of 22.6%, the indicator increased to 23.7% in June. The cost of short — term consumer loans with a term of up to one year reached 28.1% - the highest since mid-2020.

Business loans show more stable dynamics. In June, rates were 22.8%, an increase of 0.2 percentage points compared to May. Interestingly, short-term loans to companies fell to 22.1% (-0.8 p. p.), while long — term loans rose to 23.2% (+0.3 p.p.). Foreign currency loans remained stable-about 9.9%.

According to economist Otabek Bakirov, the divergence in the dynamics of interest rates on loans and deposits may be due not only to market factors. Possible causes include hidden losses recognized in the current period, as well as banks ' involvement in projects that do not correspond to their commercial profile. The expert also noted the continuing pressure on the banking sector from administrative mechanisms.

The context of the situation brings attention back to the events of March, when commercial banks began to reduce deposit rates, despite the Central Bank raising the key rate. This has raised concerns about possible interference in market-based regulatory mechanisms. Against the current background, such concerns look increasingly justified.

The calculation of the net interest margin (NIM), which reflects the difference between the loan yield and the cost of funds raised, shows the level of 3.5% in June 2025 (the difference between the rates of 23.2% and 19.7%). While this value is important for banks ' profitability, a sharp increase in it may signal increased risks and inefficiencies in the current economic model.

Given the growing credit burden and reduced incentives for long-term savings, the country's financial system is facing a need to review its priorities. For Uzbekistan, which is in the phase of active financial transformation, the observed dynamics are not just statistics, but an indicator of structural challenges that require attention at the level of regulatory and banking strategy.