These changes are largely due to the actions of the monetary sector, which affected short-term interest rates and the behavior of participants in the money market.
Before the sterilization measures were carried out by the National Bank, the volume of excess liquidity decreased by 20% and amounted to 94.9 billion soms.
On a year-on-year basis, the growth rate slowed down to 4%. The reduction in excess liquidity was driven by foreign currency sales amounting to 81.5 million US dollars, a 68.8% decrease in budget revenues from the placement of securities, as well as a high baseline level from the previous quarter, which was 118.6 billion soms.
The situation was also influenced by an increase in mandatory reserve requirements, which is related to the growth of the reservable base.
Throughout the quarter, the dynamics of liquidity were mixed. From mid-July to the end of September, there was a gradual decrease in excess liquidity against the backdrop of active cash withdrawals by commercial banks. However, by the end of September, the volume of excess liquidity increased again, mainly due to operations by government bodies.
The National Bank continued to actively pursue a policy of inflation containment by sterilizing excess reserves. The main instrument for absorbing liquidity remained overnight deposits, which accounted for 87.3% of all sterilization operations. The remaining funds were withdrawn through National Bank notes, the share of which increased by 4.8 percentage points to 12.7%, against the backdrop of an increase in the supply of 7- and 91-day instruments and the resumption of the issuance of 182-day notes. The reduction in the amount of free funds in the money market, combined with active sterilization, had a restraining effect on inflation.
