The Central Bank Maintains the Key Rate at 13.5%
Economy
Today, January 23, the Board of the Central Bank of the Republic of Uzbekistan held its regular meeting and decided to keep the key interest rate at 13.5% per annum. This decision aims to maintain inflationary expectations and economic stability.
According to the Central Bank’s press service, while overall inflation has shown a downward trend in recent months, inflationary expectations remain elevated. In December 2024, the annual inflation rate stood at 9.8%, with price growth slowing for 75% of goods and services in the consumer basket.
However, core inflation slightly increased, reaching 7.2% in December. Prices for services and non-food items are the primary contributors to core inflation. These factors are associated with rising aggregate demand and short-term supply constraints.
Consumer and investment activity in the economy remained high in 2023-2024. Growth in wages and cross-border remittances contributed to increased household incomes, continuing to support aggregate demand. Meanwhile, GDP growth is projected to reach approximately 6% in 2025.
On global markets, rising prices for certain food products are expected, presenting an inflationary risk. However, Uzbekistan’s tight monetary policy aimed at ensuring price stability is designed to mitigate these risks.
The Central Bank plans to continue its tight monetary policy to achieve the 5% inflation target in the medium term. Key factors in this process include:
Moderate growth in lending volumes;
High growth rates in deposits;
Increased household propensity to save, driven by real interest rates in the economy.
Inflationary expectations are expected to decline; however, if new inflationary pressures arise, the Central Bank may reassess the tightness of its monetary policy.
However, core inflation slightly increased, reaching 7.2% in December. Prices for services and non-food items are the primary contributors to core inflation. These factors are associated with rising aggregate demand and short-term supply constraints.
Consumer and investment activity in the economy remained high in 2023-2024. Growth in wages and cross-border remittances contributed to increased household incomes, continuing to support aggregate demand. Meanwhile, GDP growth is projected to reach approximately 6% in 2025.
On global markets, rising prices for certain food products are expected, presenting an inflationary risk. However, Uzbekistan’s tight monetary policy aimed at ensuring price stability is designed to mitigate these risks.
The Central Bank plans to continue its tight monetary policy to achieve the 5% inflation target in the medium term. Key factors in this process include:
Moderate growth in lending volumes;
High growth rates in deposits;
Increased household propensity to save, driven by real interest rates in the economy.
Inflationary expectations are expected to decline; however, if new inflationary pressures arise, the Central Bank may reassess the tightness of its monetary policy.
Powered by Froala Editor