Central Bank Of Uzbekistan Reveals Level Of Policy Rate

(MENAFN- Trend News Agency) TASHKENT, Uzbekistan, December 12. The Central Bank of Uzbekistan (CBU) has retained the policy rate at 13.5 percent annually after taking inflationary and macroeconomic projections into account, the CBU told T rend .

This decision comes in light of sustained high demand and upward price pressures that have led to a slower-than-expected decline in inflation.

In recent months, inflation has been decreasing at a slower pace than projected, with inflation expectations remaining elevated. By the end of November, annual inflation had slightly decreased to 10 percent, primarily driven by the stabilization of food prices. However, continued high consumption and investment activity have kept aggregate demand strong, elevating the risks of price increases in services and non-food goods.

The Central Bank's current tight monetary policy stance aims to reduce inflationary processes and expectations, with the goal of achieving a medium-term inflation target of 5 percent. The policy rate decision reflects the need to balance inflation control with ongoing economic growth, which is expected to remain stable at around 6–6.5 percent by the end of 2024.

Changes in certain primary household expenses and secondary effects from energy price liberalization, combined with colder weather, have contributed to heightened inflation expectations. In November, inflation expectations of households and businesses accelerated to 13.7 percent and 12.7 percent, respectively.

The CBU's decision to keep the policy rate unchanged is based on the need to address these persistent inflationary pressures while supporting sustainable economic growth. The continued high real interest rates in the banking system have increased the population's saving activity, while the moderation of credit growth and higher deposit growth help balance aggregate demand and mitigate monetary effects on inflation.

The bank may consider raising the policy rate if high demand and upward pressure on prices intensify in the coming months, highlighting its commitment to ensuring long-term price stability in the economy.

In October, due to persistent inflationary pressures driven by strong consumer and investment demand, as well as supply constraints in certain goods and services, the Board of the Central Bank decided to keep the policy rate unchanged at 13.5 percent.

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