Uzbekistan’s key rate held at 14% as central bank points to fears over reacceleration of inflation

By bne IntelliNews April 25, 2024

Uzbekistan's central bank on April 25 kept its benchmark interest rate on hold at 14%, pointing to risks that inflation could once more accelerate.

Planned hikes of state-regulated prices for certain goods and services, together with the introduction of value-added tax on some goods, could add to price growth, it said.

Uzbekistan’s annual inflation rate moved down to 7.98% in March from 8.35% in February, with lower food prices a key factor.

However, monetary conditions were forming in a relatively tight phase in comparison to the upper boundary of the updated forecast on the inflation corridor, the Central Bank of Uzbekistan (CBU) added.

The CBU, which targets inflation of 5%, has revised its 2024 annual inflation expectation to between 9% and 11% from 8% to 9%.

The inflation expectations of the population and entrepreneurs remained above the CBU’s current and projected inflation rates, the regulator noted.

Last week, the International Monetary Fund (IMF) said that following inflation in Uzbekistan of 10% last year, it was expecting 11.6% this year and 9.7% in 2025.

The CBU has stuck with the current key rate of 14% on nine consecutive occasions.

Its next rate-setting meeting is scheduled for June 13.

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