Uzbekistan’s Central Bank maintains key interest rate at 14%

On April 24, Uzbekistan’s Central Bank Board decided to maintain the key interest rate at 14% per year, according to an official statement from the bank’s press service.

Recent data on headline and core inflation indicates that inflationary processes remain uncertain, with persistent imbalances between supply and demand, as well as increasing external risks. These factors necessitate a relatively strict monetary policy, keeping the rate unchanged.

"Maintaining the current interest rate will stabilize inflation expectations and help achieve the medium-term inflation target of 5%," the Central Bank emphasized.

Since the beginning of the year, inflation has been increasing, reaching 10.3% in March. Core inflation, which excludes volatile goods, also continued to rise, reaching 8.1% annually. This trend reflects both supply-side and demand-driven price pressures.

Although fuel and energy supply improvements and a stable exchange rate have contributed to lowering inflation expectations among businesses and consumers, current inflation remains higher than anticipated.

The primary effects of energy price liberalization are expected to diminish by the end of the second quarter, contributing to a downward pressure on inflation. However, global trade disruptions, rising production costs, and heightened external inflationary pressures pose additional risks.

According to updated forecasts, overall inflation by the end of 2025 is expected to hover near the upper range of the 7-8% target corridor. Economic growth accelerated to 6.8% in the first quarter, fueled by strong consumer demand, increased investment activity, higher remittances, and credit expansion.

The Uzbek economy is expected to maintain high growth momentum, with GDP expansion forecasted at around 6% by the year-end. Private investments will play a crucial role in sustaining economic growth, driving an increase in goods and services.

Since early 2025, the exchange rates of major trading partners have stabilized, while the Uzbek som remains steady relative to these currencies. The real effective exchange rate continues to evolve within its medium-term trend.

Maintaining strict monetary conditions will help balance credit growth, sustain deposit expansion, and moderate overall demand, while reducing monetary pressures on inflation.

In light of these factors, the Central Bank Board decided to keep the key rate unchanged at 14%, ensuring price stability in the medium term. Policymakers remain committed to achieving the target inflation rate of 5% through appropriate monetary tightening.

If the next phase of energy price liberalization in May significantly impacts inflation expectations, the monetary policy stance could be reassessed.

The next Central Bank meeting to review the key interest rate is scheduled for June 12, 2025.