Uzbekistan: We expect rate to remain at 16% amid renewed cautious tone in press release

At tomorrow's meeting, we expect the Central Bank of the Republic of Uzbekistan (CBRU) to keep the base rate unchanged at 16% while maintaining its focus on supporting the attractiveness of UZS deposits and cooling inflationary expectations. We believe that the 100 bps rate cut in June was sufficient to ensure a balance between the adjustment of tight monetary conditions and a high real rate (+3.8%). At the same time, inflation continues to accelerate across all segments amid rising food prices and supply chain disruptions, while inflationary expectations remain elevated ahead of the indexation of natural monopoly tariffs. These factors may contribute to a change in the tone of the CBRU's press release from neutral to cautious.