“Central Bank will not intervene to prop up exchange rate” – Chairman Ishmetov

The Central Bank of Uzbekistan will not intervene in the exchange rate and will allow the currency to float freely, Chairman Timur Ishmetov said, adding that a flexible rate is better suited to global uncertainty.

Speaking at a press conference, Ishmetov noted it was incorrect to directly link inflation to movements in global gold prices, despite their importance for the economy and state revenues.

“We are not in favor of artificially influencing the exchange rate. We will let it float freely,” he said.

His comments came in response to a question about whether the regulator has contingency plans if a sharp drop in gold prices weakens the soum and fuels import-driven inflation.

Ishmetov said the Central Bank’s policy remains unchanged, noting that the currency strengthened last year on higher inflows, weakened earlier this year, and has since stabilized, with overall changes near zero over the past four months.

He added that while gold prices affect fiscal revenues and export earnings, the regulator aligns its foreign exchange market participation with the volume of gold purchases and does not and will not use it to steer the exchange rate.

The Central Bank kept its key interest rate unchanged at 14% following a board meeting on April 29, citing persistent inflation risks despite a slowdown in price growth. Annual inflation eased to 7.1% in March, while core inflation stood at 5.7%, according to the regulator.