Tashkent, Uzbekistan (UzDaily.com) -- On 26 August 2019, in Beijing (PRC), within the framework of the fifth meeting of the Uzbek-Chinese Intergovernmental Cooperation Committee, the National Bank for Foreign Economic Affairs of the Republic of Uzbekistan (NBU) signed a loan agreement with the State Development Bank of China (DBC) to attract a credit line in the amount of 500 million Chinese yuan.

This agreement was the seventh in a row, and testifies to the strong established partnerships betwen the two banks. The experience of interacting with the DBC demonstrates the effectiveness in implementing a number of major investment and infrastructure projects in all sectors of the economy of the Republic of Uzbekistan. At the same time, the signing of the loan agreement in RMB is the first such document reached with the leading Chinese financial institution in the history of cooperation with NBU.

The main advantage of attracting financing in RMB is the absence of dependence on jumps in the LIBOR rate. In addition, settlements on foreign trade contracts in RMB will reduce the costs of currency conversion arising from settlements in the currencies of other countries. Loans in RMB reduce the risks associated with the fluctuation of the exchange rate and provide customers of NBU with more favorable conditions for the cost of financing for the long term.

Along with this, this agreement envisages the use of new payment methods in RMB, while payments in RMB will be transferred to the supplier’s bank account directly in China, which significantly reduces the time for payments between the two countries and counterparties.

The signing of an agreement on financial cooperation gives a new impetus to bilateral relations and the further development of trade and economic relations between the two countries, and also provides an opportunity to attract credit resources on favorable terms, which creates new large investment opportunities in Uzbekistan.