Keeping Base Rate Unchanged - What It Means For Uzbekistan's Economy


(MENAFN- Trend News Agency) TASHKENT, Uzbekistan, September 16. Uzbekistan's Central Bank decided to keep the main rate at 14 percent per annum on September 14, 2023, Trend reports.

Maintaining the base rate at the current level will create the necessary conditions for the formation of inflation within the framework of the forecast until the end of the year, and is considered as a necessary measure to eliminate the influence of monetary factors on prices.

Alternative indicators of economic activity confirm the formation of aggregate demand in the economy at a high rate.

The bank further said that the number of real estate transactions increased by 7.7 percent from January through August 2023. One of the factors supporting economic activity remains the annual growth of loans to the economy by 1.3 times.

The volume of total cash receipts from January through August increased by 30.4 percent, revenue from trade and paid services – by 27.7 percent. At the same time, the volume of cross-border money transfers decreased by 32.4 percent under the influence of the high base effect, while maintaining a significant increase compared to the results of 2021.

Positive real interest rates continue to support activity in the deposit market, the bank said. In August 2023, the weighted average interest rates on term deposits of the population in the national currency amounted to 21.7 percent (17.1 percent for legal entities), resulting in an increase in the balance of term deposits amounted to 48.3 percent as of September 1.

Keeping the central bank's base rate unchanged contributes to the formation of short-term liquidity prices at a positive level of 3-4 percent in real terms, thereby contributing to the provision of moderately tight monetary conditions.

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