The Board of the Central Bank of Uzbekistan, at its meeting on March 18, decided to maintain the key interest rate at 14% per annum. According to the regulator's press service, this decision aims to control inflationary pressures and ensure price stability amid persistent economic challenges, with the bank adopting a cautious stance in light of global uncertainties.
The Central Bank noted that in recent months, the decline in overall inflation has slowed against the backdrop of rising prices for some food products. In February, overall inflation stood at 7.3%, while core inflation reached 6.3%, remaining largely unchanged despite weakening seasonal factors. The increase in food prices continues to support high inflation expectations among the population, posing a risk to economic stability.
Economic activity remains high due to aggregate demand, reflected in growth in retail and wholesale trade turnover, an increase in real estate transactions, and active execution of budget expenditures. Concurrently, a significant rise in producer prices has been observed, raising the likelihood that these costs will be passed on to final prices and affect consumer prices in the coming periods, potentially exacerbating inflationary trends.
In external economic conditions, heightened geopolitical tensions could lead to increased prices for energy resources and food on global markets due to disruptions in supply chains, as well as higher transportation costs. This may create additional pressure on domestic inflation through import prices. However, the relative stability of the currencies of key trading partners, sustained high gold prices, and steady growth in export revenues and remittances are mitigating significant pressures on the national currency.
The Central Bank emphasized the need to continue a tight monetary policy, closely monitoring inflation dynamics, expectations, aggregate demand, and external risks. If there is a delay in achieving the inflation target of 5%, monetary conditions could be further tightened. The next meeting to review the key rate is scheduled for April 29, 2026, underscoring the bank's long-term commitment to macroeconomic stability.
Source: www.gazeta.uz