In a bid to help Uzbek businesses cope with the fallout from Covid-19, the European Bank for Reconstruction and Development (EBRD) has signed a trade finance facility with three banks in the country.

The EBRD will provide a total of US$150mn to help Uzbek exporters and importers “mitigate the disruptions that severe market conditions have caused in trade and supply chains”.

The financing is being provided as part of the EBRD’s Trade Facilitation Programme (TFP), and will see the development bank raise trade finance limits by US$60mn for Asaka Bank, US$30mn for Ipoteka Bank and US$60mn for Uzpromstroybank.

The EBRD adds that this “will allow Uzbek businesses to better manage commodity stocks and plan for longer trade cycles”.

Global supply chains have been severely disrupted in the past couple of months, as governments the world over – including Uzbekistan’s – have ordered the majority of businesses to shut and for people to stay home in a bid to contain the virus.

Economists are now widely predicting a global recession, and the World Trade Organisation’s director general Roberto Azevêdo said last week that global trade could fall by as much as a third.

Uzbekistan looks likely to feel the impact as well, with the World Bank forecasting that the gas and gold exporting country’s real GDP growth will fall from 5.6% in 2019 to 1.6% in 2020.

In its Europe and Central Asia Economic Update, the World Bank blames “significantly lower external trade and widespread domestic economic disruption” for the looming travails, with the bank adding that Covid-19 is “the biggest threat yet to Uzbekistan’s ambitious market transition”.

Following the death of long-serving leader Islam Karimov in 2016, his successor Shavkat Mirziyoyev has been looking to move away from a so called “command-and-control” economy.

Since 2017 his administration has made a raft of reforms, including the unification of the exchange rate, the liberalisation of the foreign exchange market, as well as the reduction of import tariffs and excise taxes on imports.

In March the EBRD committed to providing US$1bn as part of an emergency coronavirus support package, which included “hundreds of millions” in trade finance support for companies in Europe and Asia.

According to the bank, it has seen “huge demand” for its financing since making that announcement last month.