Uzbekistan: We do not expect a shift to monetary easing

At its first meeting this year on Thursday, January 26, we expect the Central Bank of the Republic of Uzbekistan (CBRU) to keep the base rate unchanged at 15% in order to ensure a disinflationary effect and cool down inflationary expectations. Such a decision would be in line with signals provided by the CBRU in December, indicating a need in moderately tight monetary conditions in 2023 in order to bring inflation down to target levels. We believe that this approach would also help maintain the attractiveness of UZS-denominated assets. Given ongoing strong growth in food prices and likely inflationary pressure in the service segment, we expect the tone of the press release to remain neutral.