Central Bank of Uzbekistan keeps key rate at 14% to curb inflation risks

The Board of the Central Bank of Uzbekistan decided during its meeting on April 29, 2026, to maintain the main interest rate at 14% per annum. While national inflation continues its downward trajectory, the regulator cited the strengthening of external factors that could destabilize prices as a primary reason for keeping monetary conditions tight.

Photo: Kun.uz

According to the official statement, total inflation slowed to 7.1% in March 2026, which aligns with previous forecasts. This decline was largely driven by high base effects from certain goods in the preceding year. Core inflation currently stands at 5.7%. Despite this progress, the Central Bank noted that the process of price stabilization has slowed, and inflationary expectations among the population and businesses remain higher than the target levels.

The regulator expects total inflation to settle around 6.5% by the end of 2026. However, to ensure a sustainable path toward the long-term target of 5%, the bank deemed it necessary to maintain restrictive monetary conditions. This decision is reinforced by high domestic demand and ongoing uncertainties in the global economic environment.

The first quarter of 2026 saw a significant acceleration in economic activity, with real GDP growing by 8.7%. This expansion was primarily driven by the services, construction, and trade sectors. Furthermore, a steady increase in foreign direct investment continues to support economic momentum. Consequently, the Central Bank has revised its economic growth forecast for 2026 upward to a range of 7%-7.5%.

Regarding the external environment, the regulator warned of heightened risks in global oil and food markets due to escalating geopolitical tensions. These factors, combined with rising logistics and transportation costs, could exert additional pressure on domestic inflation through higher import prices. On a positive note, the strengthening of currencies in major trading partner countries, high gold prices, and stable growth in export earnings and remittances continue to support the domestic foreign exchange market.

The Central Bank emphasized that current real interest rates are positive, which encourages a higher propensity for saving among the population and helps moderate credit growth. The regulator remains committed to monitoring inflation dynamics, demand, and external risks closely. Should the risk of failing to reach the inflation target increase, the bank stated it is prepared to further tighten monetary policy to safeguard macroeconomic stability and the purchasing power of the population.

The next meeting of the Central Bank Board to review the main rate is scheduled for June 17, 2026.