Central Bank of Uzbekistan raises main rate to 14%

The Central Bank of Uzbekistan has raised the key interest rate from 13.5% to 14%. This decision was made due to continuing inflationary pressures, rising domestic demand and stronger inflation expectations.

At the board meeting on March 20, the rate was increased by 0.5 percentage points. The last time it reached this level was in July 2024, after which it declined.

The main goal of the increase is to contain inflation and achieve the target level of 5% in the medium term. Since the beginning of 2025, inflation has been gradually increasing: in February, the annual rate reached 10.1%. Among the key factors influencing inflation expectations, the regulator highlights rising prices for fuel, utilities, transport, education and medicine. As a result, inflation expectations among the population rose to 15.3%, and among entrepreneurs — to 13.8%.

The acceleration of inflation in the service sector is explained by an increase in aggregate demand, active lending to the population and an increase in cross-border money transfers. These factors also affect the dynamics of retail trade and paid services.

Since the beginning of the year, the real effective exchange rate has declined against the backdrop of strengthening currencies of major trading partners, approaching medium-term values.

The central bank emphasizes that controlling inflation and balancing supply and demand requires strict monetary policy measures. Tighter conditions are expected to slow inflation in the coming quarters, and by the end of 2025, it will fall to 7-8%.

The regulator intends to maintain a tight monetary policy to achieve the target level of inflation. If inflationary pressure increases, a further rate increase is allowed.

The next meeting of the Central Bank's Monetary Policy Board is scheduled for April 24, 2025.