Central Bank of Uzbekistan Keeps Key Rate at 14% to Stabilize Inflation

Tashkent, Uzbekistan (UzDaily.com) — The Central Bank of Uzbekistan notes that the continued relatively tight monetary conditions are contributing to a gradual easing of inflationary pressures and a reduction in inflation expectations. At the same time, certain risks remain in the economy, related to sustained aggregate consumer demand, supply constraints, and high price dynamics in the services sector. The decision taken aims to ensure a trajectory of stable inflation decline over the medium term.

In November, the trend of slowing price growth continued: annual inflation stood at 7.5%, aided by a slowdown in core inflation under the influence of relatively tight monetary policy and the strengthening of the national currency. Core inflation decreased to 6.3% year-on-year, while imported goods prices exerted a stabilizing effect on non-food inflation. Service sector inflation, although decelerating, remains above the overall inflation rate due to demand factors. Inflation expectations among households and businesses continued to decline.

Considering these factors, it is forecast that the overall inflation for 2025 will reach approximately 7.3%. The downward revision reflects a stronger-than-expected impact of imported inflation and inflation expectations as a result of the national currency’s appreciation. According to updated estimates, by the end of 2026, inflation may be around 6.5%.

Economic activity remains high, with growth rates above potential, as evidenced by increased labor market demand, higher revenues from trade and paid services, and activity in the interbank market. The economy is expected to grow 7–7.5% for the year.

Alongside the current deceleration in inflation, risks persist related to the supply of certain food products, rising transport service prices, and secondary effects from regulated price indexation. Globally, the economy is growing faster than expected due to the gradual easing of financial conditions and fiscal stimulus, while high commodity prices continue to support export earnings. Favorable external conditions are helping maintain a real effective exchange rate close to its long-term equilibrium level.

Amid relatively stable nominal interest rates in the domestic financial market, declining inflation and inflation expectations support high real interest rates, encouraging savings in the national currency, reflected in growth in term deposits. At the same time, high retail lending growth, reflecting active consumer demand and expanding financial inclusion, may exert upward pressure on inflation in the future.

Given these conditions, the Central Bank decided to maintain the key rate at 14% per annum. Monetary conditions will remain sufficiently tight to achieve the target inflation rate of 5%, with policy adjustments possible depending on price dynamics and the balance of inflation risks. The next Central Bank Board meeting on the key rate is scheduled for 28 January 2026.