Central Bank of Uzbekistan holds policy rate at 15%

TASHKENT. Jan 26 (Interfax) - The Central Bank of Uzbekistan's management board decided at a meeting on Thursday to hold the key policy rate at 15% per annum, the regulator's press office said.

The current level is "sufficient to maintain moderately tight monetary conditions in the economy. Based on the cumulative conditions and the nature of fiscal policy, it is possible that additional measures will be needed in the coming quarters to balance aggregate demand and supply," it said.

There has been steadily high economic growth in recent quarters, the main driver being aggregate consumption with relatively moderate investment activity. GDP grew 5.7% in 2022, close to the Central Bank's October forecast.

Inflation accelerated to 12.3% in 2022.

GDP growth is likely to slow in Q1 and could be 4.5%-5% for 2023 as a whole. Inflation for the year will be 8.5-9.5% in the baseline scenario.

"The Central Bank will continue to analyze the impact of monetary conditions on demand, prices and inflation expectations. Measures taken will be aimed at ensuring a balance of supply and demand and inflation within the forecast corridor, and achieving a medium-term target of 5%," the regulator said.

The next policy rate meeting is scheduled for March 16.

The Central Bank decided at a meeting on March 17 to hike the policy rate from 14% to 17% per annum" due to foreign economic risks and high uncertainty." The rate was lowered 1 pp to 16% per annum in June and another 1 pp to 15% in July and held at 15% in September and in December.