The exchange rate of the Central Bank was left unchanged 

A meeting of the Board of the Central Bank of the Republic of Uzbekistan was held today, 26 January.  It was decided to maintain the basic rate at the annual level of 15 percent.  This was reported by the Press Service of the Central Bank. 

"It is estimated that the current level of the main rate is sufficient to maintain relatively strict monetary and credit conditions in the economy.  Based on the development of the economic situation and the nature of the fiscal policy, there may be a need to take additional measures to balance supply and demand in the coming quarters," the report said. 

It is noted that the growth of the Gross Domestic Product by the end of 2022 was in line with the forecasts of the Central Bank in October and amounted to 5.7 percent. 

Although the relative balancing of fiscal incentives is expected this year, the effects of the high fiscal deficit observed in the past 3 years to support aggregate demand remain. The persistence of stability in the labor market, wages, and high volumes of cross-border remittances lead to an increase in demand for durable goods and real estate, and, in turn, to an increase in prices in these markets. 

During 2022, the economy adapted to changes in external conditions. Because the impact of external economic risks is short-term and lower compared to preliminary estimates, there was an increase in foreign exchange receipts from exports and cross-border remittances. 

According to the data, in 2022 there was a broad increase in all groups of consumer goods prices, which was reflected in the acceleration of the general annual inflation rate to 12.3 percent.  In the last half of the year, a stable growth trend was observed in the base inflation and reached 13.8% annually.  This, along with the relatively high dynamics of the producer price index, signals the possibility of a further increase in inflationary pressures in the future.  The growth dynamics of inflationary expectations in the last three months increased the probability of inflationary risks in the future. 

According to forecasts of macroeconomic development, there is a high probability of a certain slowdown in the growth of the Gross Domestic Product in the 1st quarter, and at the end of 2023, the economy will grow by 4.5-5% and the annual inflation rate will be 8.5-9.5%. is predicted to form within the framework. 
For information, the next meeting of the Central Bank Board to review the main rate is scheduled for 16 March 2023.