Central Bank of Uzbekistan again holds policy rate at 13.5%

TASHKENT. Oct 31 (Interfax) - The Central Bank of Uzbekistan on Thursday decided to keep its key policy rate unchanged at 13.5% per annum, the regulator said in a press release.

"Going by macroeconomic development forecasts and inflation expectations, the Central Bank's board decided to keep the key rate at 13.5% per annum," the regulator said.

It said annual inflation was 10.5% in September and had not changed in the past quarter. Core inflation began to grow under the influence of high consumer demand, liberalization of fuel tariffs and prices and price growth for certain types of food products, and was 7.1% in annual terms.

"A slight decrease in inflationary processes is expected in the last quarter of this year under the influence of relatively tight monetary conditions, with overall inflation for the year forecast at around 9.5%," the regulator said.

GDP rose 6.6% in 9M 2024 with growth in all key sectors. High investment activity remains one of the main drivers of economic growth. Real GDP growth is projected at 6%-6.5% in 2024.

Pro-inflationary risks may arise in the coming quarters related to energy supplies and short-term changes in prices for them, disruptions to supplies of certain goods and still relatively high service charges.

"The Central Bank will in any circumstances continue to pursue a policy aimed at achieving the inflation target of 5%, paying particular attention to the balance of supply and demand in the economy, inflation expectations and the pace of structural reforms," the regulator said.

The Central Bank decided in March 2022 to hike the policy rate from 14% to 17% per annum. The rate was lowered 1 pp to 16% per annum in June and another 1 pp to 15% in July and held at that level until March last year when it was lowered to 14% amid positive economic tendencies. Only on July 25 this year was the rate lowered, by 0.5 pp to 13.5%.

The next policy rate meeting is scheduled for December 12.