BAKU, Azerbaijan, November 15. The Central Bank (CB) of Uzbekistan will strive to reduce inflation expectations of businesses and the population through a new inflation targeting mechanism, Chairman of Uzbekistan's Central Bank, Mamarizo Nurmuratov said, Trend reports.
He spoke at the plenary session "Monetary policy in current conditions" within the XI Congress of Financiers of Kazakhstan.
"In the past few years, fiscal policy and ensuring financial stability have become key aspects of the economic development of all countries. When regulating the monetary policy of a country, it is important to determine the strategy of economic policy and its potential consequences. In addition to price stability, the Central Bank should pay attention to financial stability and financial consolidation," he said.
Nurmuratov emphasized that Uzbekistan's annual inflation rate stood at 9 percent in October 2023, which is in line with forecasts, but the core inflation rate remains above the desired level.
"With considerable uncertainty, it is difficult to determine the lagged monetary policy and how it affects inflation in the country. In a period of high volatility, monetary policy should not be a source of uncertainty," he said.
According to him, the main challenges to financial stability are increased foreign exchange demand supported by fiscal policy measures and limited credit policy transmission.
"Business activity in Central Asia is centered on quick profits such as construction and services, but such a line is not creating supply to meet market demand. The growth of industries in the long term lags behind the growth of demand factors," Nurmuratov added.
He also mentioned that it is necessary to expand industrial chains in the regions to create demand.
"The global market is fragmented to a certain extent, and it is important to use this advantage to solve the problems of rapid and comprehensive satisfaction of demand," Nurmuratov concluded.
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