Central Bank Maintains Key Interest Rate at 14% Per Annum
The Central Bank of Uzbekistan has announced that it will maintain its current tight monetary policy conditions in order to address the risks stemming from imbalances between aggregate demand and supply, as well as increasing external uncertainties.
In a decision made on April 24, the Central Bank’s Board of Directors opted to keep the key interest rate unchanged at 14 percent. The regulator explained that recent inflation figures indicate ongoing uncertainty in inflationary processes and unresolved imbalances between demand and supply.
The Central Bank aims to bring inflation indicators and expectations back to a downward trend towards the 5 percent inflation target in the medium term. Despite some improvements in fuel and energy supply and exchange rate stabilization, inflation expectations remain elevated compared to current figures.
Headline inflation has been on the rise since the beginning of the year, reaching 10.3 percent year-on-year in March, while core inflation accelerated to 8.1 percent year-on-year. Factors such as energy price liberalization effects, global inflationary pressures, and rising production costs present further risks to inflation.
Although economic growth increased to 6.8 percent in the first quarter, driven by consumer and investment activity, the Central Bank projects GDP growth to continue throughout 2025, reaching around 6 percent by year-end. Private investment is expected to support economic growth by expanding goods and services supply.
The Central Bank also expects the tight monetary policy to moderate lending growth and sustain high deposit growth rates, ultimately balancing aggregate demand and reducing the impact of monetary factors on inflation.
The key interest rate will remain at 14 percent to ensure price stability over the medium term and achieve the inflation target of 5 percent. The regulator will monitor the effects of upcoming energy price liberalization in May and review monetary policy accordingly.
The next meeting of the Central Bank’s Board to review the key rate is scheduled for June 12, 2025. In the previous meeting on March 20, the key interest rate was raised by 0.5 percentage points to 14 percent due to persistent inflationary pressures, increasing demand, and elevated inflation expectations.
