Central Bank Governor: Inflation Targeting Rebuilt Monetary Policy

Tashkent, Uzbekistan (UzDaily.uz) — The Chairman of the Central Bank of Uzbekistan, Timur Ishmetov, stated that the country's transition to an inflation-targeting regime has been a large-scale reform that completely changed the monetary policy system. He announced this on 29 June 2026 while speaking at the Monetary Policy Dialogue — 2026 forum in Tashkent.

According to him, the established inflation target of 5% made it possible to strengthen the analytical capacity of the regulator, improve the quality of macroeconomic forecasting, and make Central Bank communication more effective.

Ishmetov noted that the current policy has already brought tangible results. According to his data, inflation decreased from 20% at the beginning of 2018 to 10% in 2023, and stood at 5.5% in May of the current year. Core inflation, he said, has also been reduced to 5.7%.

The head of the Central Bank emphasized that a significant indicator was the decline in the inflation expectations of the population and businesses from 20% down to 10%. At the same time, he acknowledged that potential for further improvement remains in this area, and strengthening trust in the actions of the regulator remains one of the key tasks.

According to Ishmetov, the effectiveness of the inflation-targeting regime is determined not only by price dynamics, but also by changes in the behavior of economic agents. As one proof of this, he cited the process of dedollarization in the economy. Since 2018, the share of foreign currency deposits decreased from 41.2% to 20%, while the share of foreign currency loans fell from 54.3% to 37.4%. According to the Central Bank's assessment, these changes are structural in nature and demonstrate the growing role of the national currency in savings and settlements.

The Central Bank Chairman also noted that conducting structural reforms creates additional challenges for monetary policy. In his opinion, reducing the economic costs of disinflation is possible with high predictability of reforms and a coordinated fiscal policy.

Among the priority areas for further work, Ishmetov named strengthening the transmission mechanisms of monetary policy, developing the financial market, and continuing reforms in the banking sector. He also emphasized the importance of maintaining a flexible exchange rate, which, he said, helps mitigate the impact of external shocks and supports the effectiveness of inflation targeting.

Speaking about future prospects, the head of the Central Bank noted that the regulator must remain committed to its target objectives while simultaneously paying greater attention to analyzing various economic development scenarios.

According to him, the stability of the financial system must be ensured even under the most adverse conditions, while maintaining the course toward achieving the long-term goal of price stability.