The announcement of a credit line to state-owned Agrobank, the National Bank for Foreign Economic Activity, Microcredit Bank and Qishloq Qurilish Bank – is a another indicator that Uzbek policy makers have begun to recognise and react to the region’s worsening economic outlook. Last week, the Central Bank indicated that it was trying to gradually reduce the official value of its sum currency, in line with devaluations across Central Asia.

The banks’ safety-net, worth around $101m at the official exchange rate but unofficially worth around $45m at the Black Market rate, has been earmarked to support the banks’ liquidity, media reported. This effectively means it is a government slush fund created to bail out the banks.

The cash has been parcelled up, with 100b sums allocated to Agrobank, 75b sums to the National Bank for Foreign Economic Activity and 50b sums each for Microcredit Bank and Qishloq Qurilish Bank.

Earlier this month, the Fitch ratings agency said that Uzbek banks were generally stable.

“As internal capital generation at the state banks is moderate and lags growth, state banks are getting regular capital contributions from the government in order to comply with regulatory capital requirements,” Fitch said in its report on Nov. 11.

“Liquidity is comfortable due to solid buffers as well as potential state support.”

It also said that non-performing loans, considered those over 90 days late, were relatively low with 3% at Agrobank and 14% at Microcredit Bank.

Like the rest of the region, though, Uzbekistan has been struggling to cope with the sharp downturn in Central Asia’s economic health. This month the Uzbek government even started talking about selling off stakes in state-owned companies to increase capital and boost their knowledge- base.