“People still do not trust banks, they prefer to keep their savings in US dollars” – Central Bank

The Central Bank of Uzbekistan named the main reasons why people are not yet inclined to save.

According to the regulator, the persistence of a high share of final consumption in the total income of the population, despite the persistence of positive real rates in the economy, indicates that the population is not yet inclined to save for a number of reasons, namely: 

- underdeveloped financial and capital markets, lack of alternative investment instruments or a narrow range of financial instruments; 

- low degree of trust in financial institutions, including commercial banks;

- low level of financial literacy. 

“The low degree of trust in financial institutions can be seen in the survey of the Central Bank. According to the results, the majority of respondents prefer to keep their savings in cash in US dollars or in the form of other assets, including gold and real estate,” the Central Bank said.

The Central Bank indicates that there is traditionally a revival of savings activity with the growth of the population’s total income. However, for many years, with an increase in the total income of the population, there was also a corresponding increase in expenditures on final consumption, and the share of expenditures on final consumption in total income had a relatively stable dynamics in the region of 79-81%.

Thus, the regulator notes, stimulating the growth of savings of the population and their subsequent transformation into the economy’s real sector acquire a strategic character, due to the significant impact of this process on the rate of economic growth. In general, the current macroeconomic policy should be aimed, in part, at stimulating the savings process as one of the sources of economic growth, social development of the country and improving the welfare of the population.