The Central Bank of Uzbekistan intends to maintain strict monetary conditions until inflation decline becomes sustainable and the rate approaches the target 5%. Central Bank Chairman Timur Ishmetov stated this on September 18 at the International Forum on State Asset Management in Tashkent.

Path from 20% to 6.2%

Inflation dynamics over recent years:

  • 2018 — around 20%;
  • two years ago — around 10%;
  • now — 6.2%.

Regulator's forecast: on average by end of 2026 — around 6.5%, next year — decline to target 5%.

"This is significant progress, but we're not finished yet. Achieving this goal will remain a key priority of monetary policy and will be crucial for maintaining confidence in the economy and sustainable long-term growth," said the Central Bank head.

What this means for savers

The base rate remains at 14% per annum. The regulator does not intend to ease conditions before disinflation takes hold.

"We maintain the base rate at 14% and intend to keep monetary conditions tight until disinflation becomes sustainable and we reach our goal," said Ishmetov.

This wording provides timing guidance: upon reaching the target in 2027, the rate will begin declining, along with deposit yields. For now, the spread between the rate and inflation is nearly eight percentage points — real returns on som instruments remain high.

For those planning to place funds, it makes sense to compare deposit rates for long terms: they lock in current yield levels for the entire period.

Growth requires sustainability

The economy grew by 8.5% in the first half. The Central Bank head linked the pace to investments, increasing young population, and ongoing reforms.

However, he noted the downside:

"An economy growing at such rates and opening at such rates must be able to absorb shocks it did not create itself. This is where reserve management becomes paramount."

Connection with reserves

International reserves as of September 1 exceeded $72 billion and cover imports for over a year. The Central Bank intends to continue their diversification across asset classes, currencies, and counterparties, including placing part of the funds under external management.

The logic of this linkage is simple: high rates curb domestic inflationary pressure, while reserves provide a buffer against external shocks. Both tools work toward one goal — sustainability amid rapid growth.

Notably, at the forum Ishmetov called on participants to openly discuss risks related to gold, the dollar, and reserve diversification. Most discussions were held in closed format under the Chatham House rule.

This material is for informational purposes and is not an investment recommendation.