Uzbekistan is a Central Asian sovereign nation that occupies an area of 448,978 square km and hosts an estimated population of 32,979,000 people. The country has an estimated GDP (PPP) of $241.529 billion and a GDP per capita of $7,524. Uzbekistan is a doubly landlocked country as it is surrounded by five landlocked nations. The distance from the coast adversely affects the economy of the nation. The manufacturing and agricultural sectors contribute most significantly to the GDP of the country. Mining is also an important economic sector in Uzbekistan.
Uzbekistan’s currency is known as the soʻm which has a currency code of UZS. The name means “pure” or "pure gold” in the Turkic languages.
Development of the Currency of Uzbekistan
Uzbekistan was part of the former Soviet Union and declared its independence from the Union in 1991. For a while after its independence, Uzbekistan continued to use the Soviet/Russian ruble as its currency. On November 15, 1993, Uzbekistan launched its own currency, the soʻm. The currency was launched as a transitional currency and only banknotes were issued. There were no subdivisions of the soʻm but the denominations on the banknotes ranged from as low as 1,3, and 5 to as high as 5,000 and 10,000. The notes also had a rather simple design with the obverse side featuring the coat of arms and the other side depicting the Sher-Dor Madrasah. A year later, on July 1, 1994, a second soʻm was launched in Uzbekistan. The currency now had subdivisions where one soʻm was equal to 100 tiyin. When compared to the previous soʻm, 1,000 old soʻm was equal to 1 new soʻm.
Coins in Uzbekistan
Coins were released in two series for the second soʻm. The Cyrillic script and the Latin script were used for writing on the coins of the first and the second series, respectively. The second series included coins in denominations of 1-, 5-, 10-, 25-, 50-, and 100-soʻm. The 1-soʻm coin is made of stainless steel and the 5-so'm coin of brass-clad steel, while the 10-, 25-, 50-, and 100-soʻm coins are made of nickel-clad steel. The observe of the coins feature the Coat of arms while the reverse features a map of Uzbekistan.
High Inflation Rates in Uzbekistan
Uzbekistan suffers from a high rate of inflation which is a sensitive issue in the country. Immediately after independence, the country’s inflation dramatically increased by about 1000% every year. However, with the aid of the IMF, the country was able to reduce the high inflation rates to some extent. Due to the high inflation rate, the value of the Uzbek currency came down to 1,000 soʻm being equivalent to only $0.60 in 2013. The high inflation rates forced the Uzbeks to carry large amounts of banknotes for payments in their everyday lives including grocery shopping and bill payments. This situation caused great inconvenience to the people of the country. Thus, the government of Uzbekistan was forced to issue higher denomination banknotes. The 50,000 soʻm banknote was thus released, which currently is worth only about $1.13.