Tashkent, Uzbekistan (UzDaily.com) — At the meeting on 12 June 2025, the Board of the Central Bank decided to keep the policy rate unchanged at 14 percent per annum.

Recent dynamics in economic activity and consumer demand, along with the upward trend in core inflation, indicate that inflationary pressures persist in the economy. As a result, despite a slight decline in headline inflation in May, inflation has formed above the forecast trajectory. Under these circumstances, in order to mitigate the secondary effects of rising energy prices on inflationary processes and ensure a stable downward trend in headline inflation, the policy rate was kept at the current level.

The headline inflation rate, which had followed an upward trend since the beginning of the year, decreased in May to 8.7 percent year-on-year as the initial effects from last year’s increase in energy tariffs faded. Inflation expectations of households and businesses remain above the level of headline inflation.

Core inflation continued its upward trajectory, reaching 8.5 percent in May, driven by accelerating services inflation. In the context of strong aggregate demand, the secondary effects of the recent increase in energy prices suggest that inflationary pressures may persist for a longer period.

During January-May of this year, high economic activity was one of the main factors shaping aggregate demand. This is reflected in the growth of revenues from trade and paid services, the volume of cross-border remittances, interbank transactions, and real estate sales transactions.

Additionally, high credit growth and a rise in budget expenditures are also contributing to higher economic activity. These factors may continue to support aggregate demand in the future and exert upward pressure on price levels in the economy.

Amid global economic uncertainties and tensions in international trade, monetary conditions in many countries are expected to remain tight for a longer period. At the same time, the recent increase in global prices for certain food products may pose additional pressure on domestic prices.

The price of traditionally exported goods remaining high, along with the appreciation of exchange rates in partner countries, are supporting export earnings and cross-border remittance growth. This, in turn, contributes to a stable supply of foreign currency in the domestic foreign exchange market alongside an increase in foreign investment inflows into the country, which will help reduce exchange rate-related inflationary pressures in the coming months.

Maintaining the current restrictiveness of monetary conditions will ensure a moderation in the growth of lending and sustained high growth rates of deposits. This plays a key role in balancing aggregate demand and reducing the impact of monetary factors on inflation.

Taking the above factors into account, and in line with the objective of achieving price stability in the medium term, the Board of the Central Bank has decided to keep the policy rate unchanged at 14.0 percent.

The Central Bank will maintain a sufficiently tight monetary policy stance to achieve a reduction in inflation to the 5 percent target level in the medium term.

In case of emergence of stronger-than-expected pressures on aggregate demand and prices in the economy in the coming months, the level of restrictiveness of monetary conditions may be reconsidered.

The next meeting of the Central Bank’s Board to review the policy rate is scheduled for July 24, 2025.