THE NECESSITY OF CENTRAL BANKS IN CONTEMPORARY ECONOMIES: CALLENGES, ADAPTATIONS, AND UZBEKISTAN’S EXPERIENCE

Аннотация

This article examines the necessity of central banks in contemporary economies, with particular emphasis on their evolving functions, challenges, and adaptation strategies. Central banks today play a crucial role in maintaining monetary stability, managing inflation, supervising financial systems, and acting as lenders of last resort. The paper analyzes global challenges such as inflationary pressures, financial globalization, sovereign debt constraints, digital transformation, and the increasing demand for climate-related policies. It further explores the tools central banks have adopted worldwide, including inflation targeting, macroprudential regulation, unconventional monetary policies, and Central Bank Digital Currencies (CBDCs). Special attention is given to Uzbekistan’s central banking experience, from its post-Soviet legacy to recent reforms such as currency liberalization, transition to inflation targeting, banking sector privatization, and modernization of monetary instruments.

Comparative insights are drawn from both emerging and advanced economies, highlighting the importance of central bank independence, transparency, and innovation. The article concludes with global and Uzbekistan-specific policy recommendations, stressing the need for institutional strengthening, financial market development, and digital readiness to ensure sustainable and resilient central banking in the 21st century.