Uzbekistan: Not yet time to cut the rate

At its meeting on Thursday, October 20, we expect the Central Bank of the Republic of Uzbekistan (CBRU) to keep the base rate unchanged at 15% in order to support resilience of the disinflationary trend and anchoring of inflationary expectations. This will also help maintain the attractiveness of UZS deposits. We believe that the 200 bps rate cut in June-July was sufficient to ensure a balance between the adjustment of tight monetary conditions and a high real rate (+2.8%). Given the ongoing strong growth in food prices, as well as likely inflationary pressure in the non-food and service segments due to an inflow of Russian tourists, we expect the press release to remain neutral with no indication of a possible rate cut before year end.