Uzbekistan Som

Overview

When the Som was introduced, 25 Som were equal to 1 US Dollar. Currently, the largest denomination of Uzbek currency, the 1,000-som bill, is worth approximately 60 cents U.S, requiring Uzbeks to carry enormous numbers of bills just to do grocery shopping and pay bills. The Som was initially a word which was used in Uzbekistan to describe the Ruble, so the Som is simply another word for it.

Economy

• Since independence, the government of Uzbekistan has stated that it is committed to a gradual transition to a market-based economy.
• Progress with economic policy reforms has been cautious, but Uzbekistan has made respectable achievements.
• The government has not yet removed the gap between the black market and official exchange rates by successfully introducing convertibility of the national currency.
• The restrictive trade regime and interventionist policies continue to have a negative effect on the economy.
• Substantial structural reform is needed, particularly in the areas of improving the investment climate for foreign investors, strengthening the banking system, and freeing the agricultural sector from state control.

History

• On July 1st, 1994, a second Som was introduced at a rate of 1 new Som = 1,000 old Som. This Som is subdivided into 100 tiyin.
• The Som as it exists today came into use in 1993, when it was an official Uzbekistan currency, as opposed to being a Russian Ruble, which was used as the official currency of Uzbekistan until then.
• The Som was originally introduced with no subdivision. However, this Som was subject to serious levels of inflation and only lasted until 1994, when it was devalued (at the rate of 1,000:1) when the second Som was introduced.
• Coins were also introduced, whereas previously the Som had been issued only in the form of notes. However, the devaluation seems to have worked and the inflation rate in Uzbekistan is only just over 7%, so the currency is relatively stable.