Central Bank leaves key rate unchanged

The Central Bank’s board decided to keep the key rate at 14 percent per annum at its meeting on September 11, the regulator’s press service reported.

High levels of economic activity and consumer demand, which strengthened in the second quarter of this year, continued to exert upward pressure on prices. At the same time, inflation began to decline in August due to the elimination of last year’s base effects. The decision to maintain the key rate at 14 percent was made to slow inflationary processes and ensure that core inflation continues on a downward trend.

In August, overall inflation decreased slightly compared to July, standing at 8.8 percent year-on-year. Core inflation fell to 7.6 percent, driven by slower growth in food and non-food prices.

“The secondary effects of rising energy prices, while aggregate demand remains at a high level, are reflected in the high formation of services inflation. Although in recent months there has been a downward trend in inflation expectations among the population and entrepreneurs due to seasonal factors and exchange rate stabilization, these expectations remain above the overall inflation rate,” the Central Bank said in a statement.

In the first half of 2025, economic growth accelerated to 7.2 percent. Along with strong growth in services, significant expansion was also recorded in the industrial, construction, and agricultural sectors.

“The steady growth in cross-border remittances, the acceleration of lending, rising budget expenditures, and high investment activity are among the factors actively stimulating aggregate demand,” the statement added.

However, the regulator warned that a slower-than-expected decline in global inflation, restrictions on international trade, rising global food prices, and inflation rates in major trading partners above their targets could increase import-driven inflation in the future.

Under these conditions, Uzbekistan’s inflation rate is forecast to reach around 8.7 percent by the end of this year.

The Central Bank emphasized that maintaining the key rate at 14 percent will help contain inflationary pressures and support medium-term price stability. Continuing relatively tight monetary conditions, it said, will balance aggregate demand, preserve the attractiveness of savings, optimize lending rates, and stabilize resource prices in the money market, thereby reducing monetary drivers of inflation.

The regulator also noted that headline inflation will take time to move onto a sustained downward trajectory. If upward price pressures strengthen more than expected in the coming months, further tightening of monetary conditions may be considered.

The next meeting of the Central Bank Board to review the key rate is scheduled for October 23, 2025.