Central Bank of Uzbekistan holds policy rate at 14%
TASHKENT. April 29 (Interfax) - The Central Bank of Uzbekistan's board decided at a meeting on Wednesday to keep the key policy rate at 14% per annum, the regulator said in a press release.
"Headline inflation continued to decline and, according to forecasts, is expected to slow to 6.5% by the end of the year. At the same time, the process of price stabilization has slowed, while the impact of external factors has intensified," the regulator said.
Amid accelerating economic activity, strong aggregate demand and uncertainty in the external economic environment, it was deemed necessary to maintain tight monetary conditions to ensure a sustained reduction of inflation to the 5% target level, it said.
In March 2026, headline inflation declined to 7.1% year-on-year, in line with the forecast. This decline was mainly driven by the fading of last year's high base effects for certain goods. Core inflation stood at 5.7%.
Inflation expectations continued to decline in March, but they remain above forecast inflation levels.
"According to the updated forecasts, headline inflation is expected to be around 6.5% by the end of 2026," the regulator said.
It said economic activity accelerated in the first quarter this year, with real GDP growth reaching 8.7%. Increased activity in services, construction, and trade sectors indicates that aggregate demand factors prevail in the economy.
A steady increase in investments attracted to the country, including foreign direct investment, will continue to support economic growth in the coming quarters.
Taking these factors into account, the economic growth forecast for 2026 has been revised upward to 7%-7.5%.
Amid elevated geopolitical tensions in the external economic environment, risks of rising global oil and food prices are increasing. Along with rising logistics and transportation costs, this may create additional inflationary pressure through import prices in the future.
At the same time, the appreciation of the currencies of major trading partner countries, high gold prices, and the stable growth of export earnings and remittances are supporting supply in the domestic currency market.
Positive real interest rates in the economy are supporting households' propensity to save and contributing to the moderation of credit growth.
"Taking into account the above factors, maintaining the current monetary conditions will enable a sustained reduction of inflation to the target level and help anchor inflation expectations," the Central Bank said.
The Central Bank will closely monitor inflation dynamics, inflation expectations, aggregate demand and external risks. The Central Bank's monetary policy will remain focused on reducing inflation to the 5% target level, ensuring macroeconomic stability, and preserving the purchasing power of the population.
The Central Bank is due to hold its next key rate meeting on June 17.
The rate has been 14% since March 24, 2025, when it was raised from 13.5%.
