The Central Bank of Uzbekistan decided to raise the interest rate by 2 percentage points - up to 16% per annum as of September 25, the regulator said in a statement.
The decision was prompted by changing external factors and is aimed at reducing inflationary pressure amid rising inflation expectations, growing regulated prices and the weakening soum, the statement said.
"Despite the slowdown in the inflation rate, this trend may change as a result of the inflationary risks. Tightened monetary policy will help reduce these risks and inflation expectations," the report said.
This year's inflation rate continued to fall and amounted to 15.7% in August, below the initial forecast. This was facilitated by cheaper seasonal horticultural produce and the gradual exhaustion of the influence of the increased money supply and devaluation of the soum in 2017.
At the beginning of this year, according to the basic scenario of economic development, the Central Bank forecast annual inflation in the 11.5-13.5% range for 2018. This forecast was suppossed to be reached through maintaining favorable external factors and macroeconomic stability Uzbekistan's main trading partner, moderate increase in regulated prices and tariffs, balanced fulfillment of the consolidated state budget and moderate growth of lending to the economy.
Nevertheless, the current situation indicates the realization of inflationary risks outlined in the main areas of the monetary policy for 2018 and subsequent reviews of monetary policy, the Central Bank underscored.