The Central Bank aims to maintain inflation at around 8% in 2025, approaching the 5% target set under its inflation target, the Central Bank’s Governor Timur Ishmetov said today in his remarks at the Investor Day, organized by Franklin Templeton.

Inflation is on a downward trend, and we are aiming to keep it below 10%—around 8% (previously expected at 8.7%), meaning, we will approach the 5% target, he underscored.

The governor Ishmetov indicated to the reduced account deficit, increase in reserves, and strengthening soum among other positive macroeconomic trends.

The current account deficit is expected to decline to 3.5-4% of GDP, compared to 5% in previous years, with further reduction projected from 2026.

International reserves have reached a record $55 billion, creating a "powerful cushion for the economy against external shocks." Furthermore, the Central Bank is consistently expanding its bond portfolio, which currently stands at $1 billion invested in US Treasury bonds.

Furthermore, the floating exchange rate allows Uzbekistan to act as an absorber of external shocks, he added.

"Allowing some volatility helps contain macroeconomic imbalances and improve the effectiveness of monetary policy signaling," said Ishmetov. Since the beginning of the year, the Uzbek som has strengthened against the US dollar by 6.1%.

The Central Bank continues to improve the effectiveness of monetary policy to "make the interest rate a clear and reliable signal for the market." In other words, the Central Bank wants the interest rate to have a real impact on interest rates on loans and deposits, as well as on the behavior of banks, investors, and businesses.

According to him, the regulator has significantly improved its monetary policy framework, actively using liquidity operations to manage the short-term money market. Since August, the Central Bank has begun issuing seven-day bonds as its primary liquidity absorption instrument, improving oversight over overnight rates.

Going forward, the Central Bank plans to replace deposit auctions with seven-day bond auctions and introduce fixed-rate repo operations to further strengthen the transmission mechanism and improve the effectiveness of liquidity management, he stressed.

Thanks to regular monetary policy reviews, which provide clear information on inflation, expectations, the mortgage market, housing prices, etc., our goal is simple: to make monetary policy more predictable and strengthen public confidence, Ishmetov concluded.