November 8, 2021

Measures to reduce the currency risks of entrepreneurs

President of Uzbekistan on October 27, 2021 signed a Resolution “On additional measures to reduce the burden on business entities associated with the fulfillment of their credit obligations in foreign currency”.

The resolution indicates that commercial banks transfer loans for up to 1 million US dollars allocated in foreign currency into the national currency.

In this regard, the State Fund for Business Support (Fund) when transferring Loans to the national currency received from commercial banks in foreign currency will provide compensation to cover interest expenses in part:

  1. exceeding the Central Bank’s main rate, but no more than 5 percentage points;
  2. loans to entrepreneurs with valid compensation agreements not exceeding the equivalent of 1 million US dollars, and an interest rate not exceeding 1.75 times the size of the Central Bank’s main rate.

At the same time, the Fund is allowed to recalculate the current amounts of compensation for these loans and proportionally change their total amount.

It is also established that from November 1, 2021, loans attracted from international financial institutions and foreign government financial organizations on behalf of the Republic of Uzbekistan in foreign currency for the purpose of financing entrepreneurial projects will be re-credited to financial organizations participating in projects for a period of at least 10 years or for the period of their attraction.