Central Bank of Uzbekistan to move to inflation targeting from January 1, 2020

The Central Bank of Uzbekistan from January 1, 2020 will begin a phased transition to inflation targeting, follows from a presidential decree of November 19.

Starting from January 1, 2020, the Central Bank is instructed to ensure a phased transfer of monetary policy mechanisms to the inflation targeting regime with a goal of reducing inflation to 10% in 2021 and keeping a permanent inflation target at 5% in 2023.

The decree also defines the basic principles of monetary policy of the Central Bank, which include:

- the establishment of a permanent inflation target with a message to the general public;

- the use of a wide range of monetary policy instruments to regulate interest rates in the money market and manage inflationary processes;

- conducting a detailed macroeconomic analysis and forecasting, taking into account the available information in the domestic and foreign markets for making objective decisions in the field of monetary policy;

- improving the communication policy of the Central Bank to explain to the general public the objectives of monetary policy, ensuring a predictable macroeconomic situation and building confidence of market participants.