Central Bank of Uzbekistan again holds policy rate at 14%

TASHKENT. July 29 (Interfax) - The Central Bank of Uzbekistan's board decided at a meeting on Wednesday to keep the key policy rate at 14% per annum, the regulator said in a press release.

It said that headline inflation accelerated to 6.4% year-on-year in June. Core inflation stood at 5.7%.

The headline inflation forecast for the end of 2026 remains unchanged at 6.5% and economic growth is projected at around 7.5%-8%.

The June acceleration in inflation was mainly driven by increases in regulated energy tariffs and the liberalization of coal prices.

The Central Bank's monetary policy is still aimed at lowering inflation to the target level of 5%, ensuring macroeconomic stability and maintaining the purchasing power of households.

Risks of rising food and commodity prices in global markets persist amid heightened geopolitical tensions. In addition, disruptions to fuel supplies in trading partner countries, together with higher logistics and transportation costs, may place additional pressure on domestic inflation through import prices going forward.

"At the same time, the temporary pause in global disinflation and monetary policy tightening in a number of countries increase the likelihood that external financial conditions will remain tight for longer than previously expected. This, in turn, may prolong uncertainty surrounding external financing conditions. Monetary conditions currently remain tight. Positive real interest rates support households' propensity to save and contribute to a moderation in credit growth," the Central Bank said.

Current monetary conditions are assessed to be sufficiently tight to contain inflationary pressures amid strong demand in the economy.

"Taking the above factors into account, maintaining policy rate at 14% per annum allows inflation to decline gradually towards the target level and helps anchor expectations. The Central Bank will closely monitor inflation dynamics, inflation expectations, domestic demand factors, and changes in external economic conditions, and will continue to maintain the monetary conditions necessary to ensure price stability," the regulator said.

The Central Bank is due to hold its next key rate meeting on September 16.

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