Uzbekistan Interest Rate Decision: October 2025 Analysis and Macro Outlook
Table of Contents
Uzbekistan’s latest Interest Rate Decision, released on October 24, 2025, confirmed the policy rate at 14.00%, unchanged from the previous reading in September 2025. This marks the sixth consecutive month at this elevated level, following a series of hikes from 13.50% in early 2025. The decision aligns with the central bank’s commitment to anchor inflation expectations amid ongoing macroeconomic challenges.
Drivers this month
- Inflation remains elevated at 14.80% YoY, above the 12% target range.
- Core inflation pressures persist, driven by food and energy prices.
- Regional geopolitical tensions in Central Asia have increased risk premiums.
- Fiscal consolidation efforts continue but remain incomplete.
- Currency stability concerns amid external shocks.
Policy pulse
The 14.00% rate sits well above the historical average of 12.30% over the past five years, reflecting a tight monetary stance. The central bank’s inflation target of 12% remains unmet, justifying the pause rather than a cut. The decision signals a cautious approach, prioritizing price stability over growth acceleration.
Market lens
Immediate reaction: The UZS currency held steady against the USD, while 2-year government bond yields remained near 14.20%, indicating market confidence in the central bank’s resolve. Inflation breakevens edged slightly lower, suggesting tempered inflation expectations.
Core macroeconomic indicators provide essential context for the interest rate decision. Uzbekistan’s GDP growth slowed to 3.10% YoY in Q3 2025, down from 3.80% in Q2, reflecting tighter financial conditions and external headwinds. Inflation remains the dominant concern, with headline CPI at 14.80% YoY in September 2025, up from 14.30% in August.
Monetary Policy & Financial Conditions
The central bank’s policy rate at 14.00% is historically high, aimed at curbing inflation fueled by supply-side shocks and currency depreciation risks. Credit growth has decelerated to 8.50% YoY, down from 12% a year ago, indicating tighter lending conditions. The real interest rate, adjusted for inflation, remains slightly positive at around -0.80%, signaling a mildly restrictive stance.
Fiscal Policy & Government Budget
Fiscal policy remains moderately expansionary, with the government running a 3.20% of GDP deficit in Q3 2025, slightly improved from 3.80% in 2024. Public debt stands at 38% of GDP, manageable but rising due to infrastructure spending. The government aims to balance growth support with fiscal prudence to avoid crowding out monetary policy efforts.
External Shocks & Geopolitical Risks
Regional instability, particularly border tensions with neighboring states, has increased risk premiums and pressured the UZS exchange rate. Commodity price volatility, especially in energy and metals, has complicated inflation dynamics. Remittance inflows, a key external buffer, slowed to 6% YoY growth, down from 9% last year, reflecting global economic uncertainties.
This chart highlights Uzbekistan’s monetary policy plateau after a series of hikes, signaling a cautious pause amid stubborn inflation. The stable policy rate combined with rising inflation suggests the central bank prioritizes inflation anchoring over growth, with markets reflecting confidence in this approach.
Market lens
Immediate reaction: UZS/USD remained stable post-announcement, while 2-year yields held steady, indicating market acceptance of the status quo. Inflation-linked securities showed minor yield compression, reflecting slightly eased inflation fears.
Looking ahead, Uzbekistan’s monetary policy trajectory hinges on inflation dynamics, fiscal discipline, and external developments. The central bank’s forward guidance emphasizes data dependency, with no immediate rate cuts expected unless inflation falls below 12% sustainably.
Bullish scenario (30% probability)
- Inflation moderates to below 12% by mid-2026 due to improved supply chains and stable commodity prices.
- GDP growth rebounds to 4.50% YoY, supported by fiscal reforms and investment inflows.
- Monetary policy eases gradually, with rate cuts starting in Q3 2026.
Base scenario (50% probability)
- Inflation remains around 13-14% through 2026, with modest volatility.
- GDP growth stabilizes near 3%, constrained by tight financial conditions.
- Policy rate stays at 14% until late 2026, with cautious easing thereafter.
Bearish scenario (20% probability)
- Inflation spikes above 15% due to renewed external shocks or fiscal slippage.
- Growth stalls below 2%, risking stagflation.
- Central bank may raise rates further, exacerbating credit tightening.
Uzbekistan’s October 2025 Interest Rate Decision reflects a central bank balancing inflation control with growth risks amid a complex macro environment. The steady 14.00% rate underscores commitment to price stability despite growth headwinds. Fiscal prudence and geopolitical risk management will be critical to sustaining this balance. Market signals suggest confidence but caution, with inflation and external shocks as key variables to watch.
Continued monitoring of core inflation, credit conditions, and external flows will guide future policy shifts. Uzbekistan’s macroeconomic resilience depends on coordinated monetary and fiscal policies, alongside geopolitical stability.
Key Markets Likely to React to Interest Rate Decision
The interest rate decision in Uzbekistan typically influences local currency dynamics, bond yields, and regional equity markets. Key instruments to watch include the USDUZS forex pair, reflecting currency stability; the UZBEX equity index, sensitive to economic growth; and the MTUM momentum ETF, which tracks regional market sentiment. Additionally, the BTCUSD pair can serve as a proxy for risk appetite shifts globally, while the EURUZS pair offers insights into cross-currency flows impacting Uzbekistan.
FAQs
- What is the current interest rate in Uzbekistan?
- The policy rate is 14.00% as of October 24, 2025, unchanged from the previous month.
- How does the interest rate affect inflation in Uzbekistan?
- The high policy rate aims to curb inflation, which remains elevated at 14.80% YoY, by tightening credit and stabilizing the currency.
- What are the risks to Uzbekistan’s monetary policy outlook?
- Risks include geopolitical tensions, commodity price shocks, and fiscal slippage, which could force further rate hikes or stall growth.
Final takeaway: Uzbekistan’s steady 14.00% interest rate reflects a cautious, data-driven approach to persistent inflation and external risks, balancing price stability with growth challenges in a complex regional environment.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
USDUZS – Uzbek Som to US Dollar forex pair, sensitive to interest rate changes and currency stability.
UZBEX – Uzbekistan equity index, reflecting domestic economic growth and investor sentiment.
MTUM – Momentum ETF, tracks regional market trends influenced by monetary policy shifts.
BTCUSD – Bitcoin to USD pair, a global risk sentiment barometer impacting emerging markets.
EURUZS – Euro to Uzbek Som forex pair, indicating cross-currency flows and trade impacts.
The October 2025 interest rate of 14.00% remains unchanged from September and above the 12-month average of 13.60%. This stability follows a sharp rise from 13.50% in early 2025, reflecting the central bank’s firm anti-inflation stance. Inflation trends show a slight uptick, with headline CPI rising from 14.30% to 14.80% YoY over the past month, underscoring persistent price pressures.
Financial market indicators reveal steady bond yields near 14.20%, slightly above the policy rate, and a stable UZS/USD exchange rate around 11,200. Credit growth deceleration and stable inflation breakevens suggest markets anticipate a prolonged tight monetary environment.