TASHKENT, Uzbekistan, September 12. The Central Bank of Uzbekistan (CBU) decided to keep the policy rate at 13.5 percent per year, the CBU told Trend.
In order to reduce inflation to the projected levels by the end of this year and achieve the 5 percent target in the medium term, the Board of the Central Bank decided to keep the policy rate unchanged at 13.5 percent.
The bank noted that in the last three months, annual headline inflation stayed flat and amounted to 10.5 percent in August. In the current year, lower prices for fruit and vegetables had a downward impact of about 1 percentage point on inflation. However, having a declining trend since the beginning of the year, annual core inflation ceased to slow down after June.
“Positive economic activity is also reflected in the higher revenues from trade and paid services, export earnings, and remittances compared to the corresponding period of the previous year,” the CBU stressed.
The CBU emphasized that given an increase in the overall liquidity of the banking system and the policy rate cut in July, interest rates in the money market declined slightly. This, in turn, resulted in lower yields in the government securities market. Meanwhile, the increase in pensions and public sector wages in September-October will serve to boost consumer demand in the coming quarters.
Earlier in July, the bank reduced the level of the policy rate in Uzbekistan from 14 percent per year to 13.5 percent due to the downward trend in core inflation and inflation expectations, lower headline inflation, and relatively tight monetary conditions.