The Central Bank believes that it is necessary to shift to inflation targeting before the end of 2019. This should help focus the government and the Central Bank on reducing inflation, the First Deputy Chairman of the Central Bank Ilkhom Norkulov said at a briefing Monday.
To increase confidence in soum, the national currency, it is necessary to achieve a low inflation rate of 5%, he added.
It was previously reported that the Central Bank planned to switch over to the inflation targeting with constant inflation target to be set at 5% by 2023.
Last December, Director of the Central Bank's Monetary Policy Department Behzod Hamraev noted that the switch to inflation targeting requires demonopolization of the economy and the creation of conditions for liberalization of prices.
Many sectors in Uzbekistan, including railway, aviation, telecommunications and others, are monopolized by the state-owned companies. The Central Bank decided not to wait for the creation of favorable conditions and to switch to inflation targeting by the end of this year, which should push the government to more decisive measures.
“To strengthen confidence in the national currency, we need a low inflation rate. Our analyzes show that this should not be higher than 5%. If it is 9%, then this is already too high, in the sense that you are not capable of making adequate plans, forecasts about your soum expenses for the next two or three years, said Ilkhom Norkulov.
We should already work seriously [to contain inflation]. The early switching to inflation targeting will make us work harder to achieve the targeting of inflation, Norkulov concluded.
