BAKU, Azerbaijan, August 1. The Central Bank of Uzbekistan left its key interest rate unchanged at 14 percent on July 29, citing rising inflation, strong domestic demand and persistent external risks as reasons for maintaining tight monetary policy.
This was reflected in a statement by the Central Bank of Uzbekistan.
According to the regulator, the current monetary policy stance remains sufficiently restrictive to bring inflation back toward the bank's 5 percent medium-term target.
The central bank said one of the key factors behind the decision was the recent acceleration in inflation. Annual inflation rose to 6.4 percent in June, driven by higher energy tariffs and the liberalization of coal prices.
The regulator also warned that the effects of utility tariff increases could spread to a broader range of goods and services during the second half of the year, creating additional inflationary pressure.
The central bank noted that strong economic activity also influenced its decision. Uzbekistan's gross domestic product (GDP) expanded by 8.5 percent in the first half of 2026, while robust consumer spending and investment demand continued to support economic growth but also contributed to price pressures.
The regulator further highlighted external risks, including geopolitical tensions, the possibility of higher global commodity and food prices, and the continuation of tight monetary policy in major economies, all of which could increase inflationary pressures and make external financing conditions more challenging.
The Central Bank maintained its end-2026 inflation forecast at 6.5 percent, adding that the current 14 percent policy rate would help anchor inflation expectations and ensure a gradual return of inflation toward its target. The regulator's next monetary policy meeting is scheduled for Sept.16.
The central bank's assessment is consistent with the latest data from Uzbekistan's National Statistics Committee, which showed that the consumer price index (CPI) rose 0.6 percent in June, bringing annual inflation to 6.4 percent and cumulative inflation in January-June to 3.3 percent. Core inflation, which excludes seasonal fruit and vegetable prices, stood at 6.9 percent year on year.
According to the statistics committee, housing and utility services remained the main drivers of inflation after revised household tariffs took effect. Electricity prices increased 9.6 percent in June, while natural gas tariffs rose 10.7 percent. Prices for coal, following market liberalization, more than doubled and alone contributed 0.48 percentage points to monthly inflation. Meanwhile, lower seasonal fruit and vegetable prices helped offset part of the upward pressure on consumer prices.
According to Trend's analysis, the Central Bank's decision reflects a cautious approach to balancing strong economic growth with persistent inflationary pressures. Although GDP expanded by 8.5 percent in the first half of 2026, annual inflation accelerated to 6.4 percent in June, driven largely by regulated price increases for electricity, natural gas and coal. At the same time, core inflation remained higher at 6.9 percent, suggesting underlying price pressures extend beyond seasonal factors. By maintaining the policy rate at 14 percent while keeping its 6.5 percent year-end inflation forecast unchanged, the regulator signaled that it considers the current level of monetary tightening sufficient to steer inflation gradually back toward its 5 percent target while preserving economic momentum.
