Tashkent, Uzbekistan (UzDaily.com) — On 20 March 2025, the Board of the Central Bank of Uzbekistan decided to raise the key interest rate by 0.5 percentage points to 14% per annum.

The last time the rate stood at 14% was in July 2024, after which the regulator lowered it to 13.5%.

According to the Central Bank, this decision was driven by the need to tighten monetary conditions amid persistent inflationary pressures, rising consumer demand, and growing inflation expectations.

The move aims to curb these pressures while considering potential inflation risks in the coming months and achieving the medium-term inflation target of 5%, the regulator noted.

Since the beginning of 2025, inflation has shown a slight increase, reaching an annual rate of 10.1% in February. The main contributors to this trend were rising prices for certain goods and services, including fuel, utilities, transportation, education, and healthcare. These price increases also impacted inflation expectations, which in February stood at 15.3% among households and 13.8% among businesses.

In recent months, inflation in the services sector has accelerated due to rising aggregate demand, driven by increased cross-border remittances and active consumer lending. This, in turn, has influenced retail trade dynamics and boosted revenues from paid services.

Additionally, due to the strengthening of currencies of Uzbekistan’s key trading partners, the real effective exchange rate has been declining, approaching its medium-term level.

To curb inflation and maintain a balance between supply and demand in the economy, the Central Bank decided to tighten monetary conditions. Raising the key rate to 14% is expected to stabilize prices in the medium term.

The tightening of monetary policy is anticipated to balance aggregate demand and reduce inflationary pressures. As a result, inflation may slow in the coming quarters, creating conditions for overall inflation to decline to 7-8% by the end of the year.

The Central Bank will continue to maintain the necessary level of monetary policy tightness, focusing on achieving the 5% inflation target in the medium term. Should inflationary pressures intensify and demand exceed forecasted levels, monetary policy will be adjusted accordingly.

The next Central Bank Board meeting, where further adjustments to the key interest rate will be considered, is scheduled for 24 April 2025.