Tashkent, Uzbekistan (UzDaily.com) -- IFC, a member of the World Bank Group, and Ipak Yuli Bank have signed an agreement that allows the bank to better manage its currency risk and provide local currency finance for small and medium enterprises, which are key drivers of economic growth in Uzbekistan.

Under the agreement, IFC and Ipak Yuli Bank will execute cross-currency swap transactions under an International Swaps and Derivatives Association (ISDA) Master Agreement, a standard document that governs over-the-counter derivative transactions. It allows the bank to hedge its foreign currency-denominated funding and better manage its assets and liabilities mismatches. IFC is the only financial institution that provides local banks in Uzbekistan with this kind of risk-management tool.

“This is the first such agreement that Ipak Yuli Bank has signed that is aimed at increasing funding through derivative financial instruments. This partnership with IFC will help expand our lending to customers in local currency, while effectively mitigating financial risks and managing our currency-risk exposure,” said Saidabror Savdakhmedov, Chairman of the Management Board of Ipak Yuli Bank.

Cassandra Colbert, IFC Regional Manager for Central Asia, said, “This agreement shows that IFC is standing by its partner banks and is ready to support them in all circumstances. Ipak Yuli Bank can better manage its currency risk and continue lending in local currency to firms that need funding. This is critically important at a time when businesses are suffering currency vulnerabilities due to the global impact of the COVID-19 crises.”

IFC has partnered with Ipak Yuli Bank, one of the largest private banks in Uzbekistan, since 2018, and has provided the bank with a financing of US$15 million denominated in Uzbek soum.