Uzbekistan: Central Bank keeps rates unchanged, doubles down on hawkish message

CAUCASUS / CENTRAL ASIA - In Brief 26 Oct 2023 by Ivan Tchakarov
The Central Bank of Uzbekistan kept the policy rate unchanged at 14.0 percent. This is the fifth consecutive decision to keep the policy rate at this level since the last 100bpt cut in Mar 2023. After raising the refinancing rate by 300bpts to 17.0 percent in Mar 2022 due to elevated geopolitical risks and higher inflation, the central bank eased monetary policy twice in 2022 by 100bpts to 15.0 percent, and further to 14.0 percent in Mar’2023. The recent step depreciation of the sum and the dual decision to raise electricity prices for corporates and households have now created a less welcoming backdrop for price growth. Downward pressure on the RUB in summer months forced Uzbekistan to offset its influence on the real effective exchange rate via allowing a faster pace of depreciation against the USD. Inflation expectations responded fast to these developments with households upgrading their views on price growth to 14.2 percent in Aug from 13.3 in Jun. Similarly, inflation expectations of corporates rose from 13.2 percent in Jun to 14.4 percent in Aug. There was some moderation of inflation expectations in Sep given the stabilization of the exchange rate, with household and corporates now anticipating 13.5 percent and 14.25 percent inflation in the next 12 months, respectively. In addition, the government announced that electricity prices for corporate would double from Oct 1st while those for households would increase from Nov 1st. The decision to raise prices for individuals is not a blanket one but will affect only those consumers with electricity needs that exceed average monthly usage. At the same time, increases for the latter will be hefty, ranging from 100 to ...

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2024 GlobalSource Partners. All rights reserved. This is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this or its contents.