The Board of the Central Bank of Uzbekistan on April 20 decided to keep the interest rate at 16% per annum, the Central Bank said. The decision was based on the need to keep the current monetary policies and preserve the downward inflationary expectations trend.
Annual inflation in Q1 was at 13.6%. The yearly inflationary trend was slightly higher to the previous year.
In general, in Q1, the inflation rate was lower than expected and was influenced by seasonal factors from the supply side of certain types of food items, as well as by the continued impact of the increase in regulated prices in November 2018, high level of lending, expanding the VAT base and a slight weakening of the national currency, the regulator said.
The macroeconomic situation matched the Central Bank’s basic projections. The economy maintained a high level of production and investment activity.
The continuation of the “moderately tight monetary policies and effective prudential supervision measures” prevented a sharp increase in lending in the national currency and thus helped to cut the impact of monetary inflation factors, the statement added.
The bank kept the baseline inflation forecast for 2019 at the level of 13.5–15.5%.
In Q2 and 3, the average monthly inflation rate will be within the limits of last year's values, that is, the annual inflation rates are not expected significantly decrease.