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TASHKENT, April 24 (Reuters) - Uzbekistan has secured preliminary agreements for more than $3 billion in long-term soft loans and grants from international financial institutions, and may attract more, temporarily increasing the cap on borrowings, the government said on Friday.
The Tashkent government has said it would use the borrowed funds to combat the spread of the novel coronavirus and support its economy amid the global recession.
The Central Asian nation had previously decided to limit annual foreign borrowings by the public sector to $4 billion, but Deputy Finance Minister Odilbek Isakov said the government planned to review the figure due to the COVID-19 crisis.
The country’s financing needs will depend on how long the pandemic continues, Isakov said, and Tashkent will stick to its other self-imposed limit capping foreign debt of the public sector at 50% of gross domestic product.
“...Even in the most optimistic scenario, it does no harm to have additional fiscal buffers,” he said.
Isakov said Uzbek state-owned banks and companies, such as the country’s biggest lender NBU, still planned to tap the Eurobond market as well either this year or next year. (Reporting by Mukhammadsharif Mamatkulov; Writing by Olzhas Auyezov; Editing by Alison Williams and Emelia Sithole-Matarise)