The Central Bank's board has decided to maintain the key interest rate at 13.5% per annum.

In recent months, despite strong demand in the economy and considerable pressure on prices, the pace of inflation decline has been slower than anticipated, leading to an increase in inflation expectations. According to forecasts, by the end of the current year, the overall inflation rate is expected to be near the upper limit of the established range.

https://uzdaily.uz/ru/pravlenie-tsb-prinialo-reshenie-sokhranit-osnovnuiu-stavku-na-urovne-135-godovykh/2024-12-13 08:47:45

Over the past two months, annual inflation has decreased, reaching 10% by the end of November. The main contributor to this decline was the stabilization of food prices. However, there are still risks of rising costs for services and non-food goods, driven by high aggregate demand supported by consumer and investor activity.

Additional pressure on inflation is exerted by changes in prices for essential consumer goods and the secondary effects of the liberalization of energy tariffs amid seasonal cooling. In November, inflation expectations among the population and businesses increased, reaching 13.7% and 12.7%, respectively.

Core inflation has remained around 7.0% over the past four months, reflecting the stable influence of demand factors. The rise in prices for services and non-food goods, along with an increase in retail turnover and the service sector, confirms this trend. Aggregate demand continues to put pressure on inflation, supported by rising wages, increased cross-border transfers, and high investment activity.

As a result, in the second half of 2024, the gross domestic product is showing steady growth. For the year, GDP is expected to increase by 6–6.5%.

Containing inflation amid rising real incomes requires maintaining a balance between supply and demand. This necessitates the preservation of the current tight monetary conditions.

The current levels of interest rates in the money market and the yields on government bonds indicate a stringent monetary policy. High real interest rates encourage savings among the population, while moderate growth rates in lending and deposits help balance aggregate demand, reducing the impact of monetary factors on inflation.

Considering these factors, the Central Bank has decided to maintain the key rate at 13.5% per annum.

In the medium term, monetary policy will continue to uphold the level of tightness necessary for a sustainable reduction of inflation to the target of 5%. Special attention will be paid to the balance of supply and demand, inflation expectations, and the pace of structural reforms.

If the risks of increased demand and inflationary pressure rise in future quarters, the Central Bank may consider the possibility of raising the key rate.

The next board meeting regarding the key rate is scheduled for January 23, 2025.