Uzbekistan's Central Bank holds key rate at 14%

TASHKENT. March 18 (Interfax) - The Central Bank of Uzbekistan's board decided at a meeting on Wednesday to keep the key rate at 14% per annum, the regulator said in a press release.

It said that in recent months, the downward trend in headline inflation had slowed and remained broadly unchanged due to the acceleration in food price inflation. At the same time, persistently high consumer activity and expected pro-inflationary risks in external conditions necessitate maintaining tight monetary conditions to bring inflation down to the medium-term target level.

Since the beginning of 2026, some acceleration in inflationary processes has been observed. As a result, core inflation shifted to an upward trajectory, reaching 6.3% in February. Meanwhile, due to the diminishing impact of seasonal factors, headline inflation remained broadly unchanged at 7.3%.

Economic activity remained high, supported by strong aggregate demand. This was reflected in the dynamics of retail and wholesale trade turnover, the number of real estate transactions, and the execution of budget expenditures. These factors support sustained growth rates in industry, services, and construction sectors.

Rising geopolitical tensions are also generating upward risks to prices. In particular, disruptions in global supply chains may lead to increases in global prices for energy resources and food products. Changes in logistics channels may also increase transportation costs. This, in turn, may create additional pressure on domestic inflation through import prices.

"Improved expectations regarding the relative stability of key trading partners' currencies, persistently high gold prices, and continued growth in export revenues and remittance inflows suggest that there are no significant pressures on the real exchange rate of the national currency," the Central Bank said.

A gradual normalization of lending growth is being observed in the economy. Tight monetary conditions, along with the application of macro-prudential measures in the consumer lending segment, will help ensure a balanced aggregate demand and reduce excessive pressure on prices.

"Taking into account the above factors, it was deemed necessary to continue tight monetary policy to ensure price stability and reduce inflation expectations" the regulator said.

The Central Bank said its monetary policy would remain focused on reducing inflation to the 5% medium-term target, ensuring macroeconomic stability, and preserving the purchasing power of the population.

The Central Bank is due to hold its next key rate meeting on April 29.

The rate has been 14% since March 24, 2025, when it was raised from 13.5%.