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22 October 2019

Central Bank kept the refinancing rate unchanged at 16% per annum.

This decision of the Central Bank is based on the continuing dynamics of inflation and inflation expectations, the occurrence of one-time inflation shocks, as well as on the basis of the need to use a prudent approach to further increase rates and ensure the financial stability of commercial banks, due to some concerns about the growth of loans in foreign currency and strengthening the segmentation of the credit market, the press service of the Central Bank of Uzbekistan reports.

During the first 7 months of this year inflationary processes in the economy developed according to the baseline scenario, in connection with which the annual growth rate of consumer prices was within the forecast parameters of 13.5-15.5%.

However, in the III quarter of this year individual inflation risks realized in alternative scenarios were realized, which led to accelerated inflation in the considered time period.

At present the Central Bank refinancing rate is at an acceptable level for the economy, when the real interest rates on deposits and loans in national currency are positive.

At more moderate lending rates, as well as taking into account already implemented inflation risks (indexation of wages and pensions, increase in electricity and gas tariffs, devaluation of the sum), inflation is expected to slow down and form at the end of the year near the upper limit of the base forecast corridor – 15.5%.