The Central Bank's BOD decided to keep the interest rate at 14% per annum at its meeting today, the Bank’s press service said.
The Central Bank noted that high economic activity and consumer demand had continued to influence prices in Q2. However, since August, after the last year's base effects were exhausted, the inflation began to go down.
As of August, the inflation stood at 8.8% against 9% a month earlier. The core inflation fell to 7.6% due to a slowdown in the growth of prices for food and non-food goods.
While, the Central Bank emphasized that continued high aggregate demand and rising prices for energy resources (gas, electricity) had continued to raise inflation in the services sector. Seasonal factors and exchange rate stability have influenced the decline in inflation expectations in recent months, although expectations still surpass actual figures.
The economic growth in H1 accelerated to 7.2%. In addition to the service sector, industry, construction and agriculture showed high growth rates. Significant factors in the growth of aggregate demand were cross-border transfers, acceleration of lending, increase in budget expenditures and investment activity.
The regulator also pointed to the external risks. A slower decline in global inflation, rising food prices and exceeding inflation targets in the countries – Uzbekistan’s main trading partners may increase imported pressure on prices.
According to the Central Bank's projections, in 2025, inflation will reach 8.7%. This is higher than the previous forecasts of 8% for the first quarter and 7-8% (at the beginning of the year).
The Central Bank emphasized that keeping a relatively tight monetary policy was necessary to maintain the attractiveness of savings, balanced lending and the stability of resource prices in the money market. This should help "balance aggregate demand and reduce the impact of monetary factors on inflation."
"The transition of general inflation to a sustainable downward trajectory will require some time. If risks and grounds arise that the pressure on prices in the coming months will be higher than expected, the tightness of monetary conditions may be revised,” the statement says. That is, the regulator allows for an increase in the base rate.
The next meeting of the Central Bank Board on the base rate is scheduled for October 23, 2025.
