MONETARY POLICY TRANSMISSION, EXCHANGE RATE VOLATILITY, AND LABOUR MARKET RESILIENCE: EMPIRICAL EVIDENCE FROM UZBEKISTAN

Abstract

This study examines the relationship between exchange rate volatility and labour market resilience in Uzbekistan, with particular emphasis on the role of monetary policy transmission mechanisms. The research is motivated by the growing importance of exchange rate stability in supporting macroeconomic performance, employment dynamics, and the capacity of emerging economies to adapt to external and domestic economic fluctuations. The study investigates how monetary policy instruments, particularly the policy interest rate, inflation management measures, and exchange rate interventions, influence exchange rate volatility and, subsequently, labour market outcomes. An econometric framework is proposed to assess the transmission of exchange rate fluctuations to employment and unemployment while controlling for key macroeconomic factors, including economic growth, inflation, and investment. The study employs time-series econometric techniques, including exchange rate volatility modelling and dynamic regression analysis, to identify both short- and long-run relationships. Particular attention is given to the channels through which monetary policy influences exchange rate stability and labour market conditions. The expected findings are intended to contribute to a better understanding of the interaction between exchange rate stabilisation and labour market resilience in an emerging economy. The results may provide an empirical basis for enhancing monetary policy coordination and developing policy measures aimed at maintaining macroeconomic stability while supporting sustainable employment and strengthening labour market resilience in Uzbekistan.