A Central Bank Interest Rate Hike in Uzbekistan but a Cut in Switzerland – Currency Thoughts

A Central Bank Interest Rate Hike in Uzbekistan but a Cut in Switzerland

March 20, 2025

Uzbekistan is a different case altogether, and its circumstances call for progressive tightening. Officials at the Central Bank of Uzbekistan today raised their policy rate by half a percentage point back to 14.0%, matching a level that prevailed from March 2024 to July 2024 and before that from September 2020 to March 2022. CPI inflation printed in February at 20.13%, up from 9.7% at the end of 2024. This rise has been accompanied by indications of rising inflation expectations held by consumers and businesses alike. Even if inflation were to fall to 7-8% late this year as monetary officials predict, it would still be above their 5% target.

Swiss monetary policy is reviewed just quarterly. Swiss National Bank officials had maintained a peak 1.75% interest rate from June 2023 until an initial cut of 25 basis points. Two more 25-bp reductions were made in June and September before halving the rate from 1.0% to 0.5% at last December’s review. They decided to cut the rate in half again today to 0.25%, reaching its lowest level since September 2022. The Swiss franc is still considered overvalued, so they also reserve the prerogative to intervene when needed to prevent undue appreciation. At 0.3% in February, CPI inflation has slowed to a 46-month low, and officials project inflation staying below 1% through 2027. They worry, too, about what else is happening in the world: “The economic outlook for Switzerland has become considerably more uncertain. Against the backdrop of increased trade and geopolitical uncertainties worldwide, developments abroad continue to represent the main risk.”

Copyright 2025, Larry Greenberg. All rights Reserved. No secondary distribution without express permission.

Tags: Central Bank of Uzbekistan, Swiss National Bank

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