The Central Bank increased the key rate by 0.5 percentage points, setting it at 14 percent per annum. This decision is aimed at curbing inflationary expectations, taking into account the inflationary risks expected in the coming months, and creating sufficient conditions for achieving the 5 percent inflation target in the medium term.

Year-to-date, there has been a slight increase in the overall inflation rate reaching10.1 percent per annum as of February.

“This trend was due to the increase in prices for some goods and services. In particular, the increase in fuel prices, utility, transport, education and medical service tariffs also had an increasing effect on inflationary expectations, and in February, the population's inflation expectations amounted to 15.3 percent, and the expectations of business entities topped 13.8 percent.

The high level of services inflation in recent months is explained by the increasing activity of aggregate demand factors in the economy, including cross-border remittances and loans to the public. This, in turn, is also reflected in the dynamics of retail trade turnover and receipts from paid services, the Central Bank said in a statement.

Since the beginning of the year, under the influence of the strengthening of the currencies of Uzbekistan’s major trade partners, the real effective exchange rate has shown a downward trend and has approached its medium-term trend.

Optimizing inflationary processes in the economy and ensuring a balance between aggregate demand and supply require an increase in the level of monetary and credit conditions.

Taking into account the above factors, the Central Bank Board decided to increase the key rate by 0.5 percentage points, setting it at 14 percent per annum, in order to ensure price stability in the medium term.