Improving the theoretical foundations of conducting monetary policy

The article shows the Monetary policy goals traditionally include price stability, founded economic growth, full employment, smoothing business cycles, preventing financial crises, and stabilizing interest rates and exchange rates. At the present stage, the currencies exchange rate is actively supported through operations in the foreign exchange market, which is confirmed by the large-scale accumulation of international reserves of the Bank of Uzbekistan. In the absence of sterilization mechanisms, such a practice inevitably leads to inflation, since a huge mass of soums flows into the market, the growth of which in many respects exceeds the growth of the economy as a whole.

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