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Uzbek Central Bank makes decision on its main rate

Uzbekistan 20 January 2022 17:50 (UTC +04:00)
Uzbek Central Bank makes decision on its main rate

BAKU, Azerbaijan, Jan.20

By Natavan Rzayeva - Trend:

The main rate of the Uzbek Central Bank was left unchanged at 14 percent per annum, Trend reports referring to the bank.

This was done in order to achieve inflation forecasts for the current year against the backdrop of strong economic growth, as well as to maintain monetary conditions that help reduce price increases and stimulate savings.

According to the bank, the declining dynamics and inflation forecast create opportunities for lowering the interest rate, but risks and uncertainties that persist in external and domestic economic conditions require that the interest rate be kept at the current level.

At the end of 2021, the inflation rate in the country was formed at the level of 10 percent.

The main factor in the formation of the inflationary environment in the country in the past year was a significant increase in prices for food, fuel, and energy products.

The core inflation rate slowed to 8.8 percent in 2021, which is the lowest level in the last five years.

In Uzbekistan, 2021 was a year of economic recovery after a sharp slowdown in 2020.

According to the bank, the gross domestic product grew by 7.4 percent last year.

At the same time, fiscal expenditures and loans from commercial banks directed to the economy were the main factors supporting economic and investment activity.

External conditions for Uzbekistan was characterized by an acceleration of global inflationary processes as a result of rising prices for food and fuel and energy products, as well as a response tightening of monetary conditions in most developing countries in 2021.

At the same time, against the backdrop of uncertainties and risks of a pandemic at the end of the year, it is assumed that inflationary processes, initially recognized as temporary, may put pressure on prices for a longer period of time.

At the end of 2021, the devaluation of the soum exchange rate amounted to 3.4 percent, which is the lowest figure in three years.

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