Central Bank keeps key rate unchanged at 14 percent

At its meeting on December 11, 2025, the Board of the Central Bank decided to keep the key policy rate at 14 percent per annum.

According to the regulator, tight monetary conditions are supporting a gradual decline in inflationary pressures and inflation expectations. At the same time, certain risks persist due to strong aggregate consumer demand, supply-side factors, and elevated price dynamics in the services sector. The decision aims to ensure that inflation continues on a sustainable downward trajectory in the medium term.

The disinflation trend continued in November, with annual inflation falling to 7.5 percent. The slowdown in core inflation, driven largely by tight monetary conditions and a stronger exchange rate, made the greatest contribution. In November, core inflation fell to 6.3 percent year-on-year. Declining import prices also helped stabilize non-food inflation.

Despite some easing in services inflation, it remains above the headline rate due to demand-driven pressures. Meanwhile, inflation expectations among households and businesses continued to decline in November.

Taking these factors into account, overall inflation for the end of 2025 is now projected at around 7.3 percent. The forecast was revised downward because the national currency strengthened more than previously estimated, exerting a stronger-than-expected dampening effect on imported inflation and inflation expectations.

According to updated projections, inflation is expected to reach around 6.5 percent by the end of 2026.

Economic activity remains high, with growth rates exceeding potential. Rising labor demand, increased revenues in trade and paid services, and higher volumes of interbank transactions all reflect this trend. Against the backdrop of current economic and investment activity, GDP growth for the year is expected to reach 7–7.5 percent.

Alongside the current disinflation trend, supply-side risks persist. These include risks related to the supply of certain key food products, recent increases in transportation prices, and secondary effects from the indexation of administered prices.

Global financial conditions are gradually easing, and fiscal stimulus is supporting stronger-than-expected global economic growth. At the same time, commodity prices remain elevated, which is expected to continue supporting Uzbekistan’s export revenues.

Under favorable external conditions, the real effective exchange rate is projected to remain close to its long-term equilibrium trend.

With nominal interest rates in the domestic market relatively stable, declining inflation and inflation expectations have driven real interest rates higher, encouraging savings in the national currency. This is reflected in strong growth in the volume of term deposits.

At the same time, increased financial inclusion has kept retail lending growth elevated. While this supports aggregate demand by sustaining consumption, it could also raise inflationary pressures going forward.

Under these conditions, maintaining the key rate at 14 percent was deemed necessary to ensure that disinflation continues and inflationary risks are contained.

The Central Bank Board will hold its next meeting to review the key rate on January 28, 2026.