The Uzbekistan Sum, abbreviated as UZS and symbolized as “soʻm” or “сўм” in Latin and Cyrillic script respectively, is the official currency of Uzbekistan.
History
The Uzbekistan Sum was introduced on July 1, 1994, replacing the Soviet ruble at a rate of 1 sum = 1000 rubles.
The currency was initially introduced in the form of coupons issued by the government, which were later replaced with coins and banknotes.
The transition to the new currency was marked by a period of inflation and economic instability, which persisted throughout the 1990s.
Since then, Uzbekistan has taken several measures to stabilize its currency, including implementing stricter monetary policies and engaging in currency reforms.
Central Bank
The Central Bank of the Republic of Uzbekistan, or Oʻzbekiston Respublikasi Markaziy Banki, is responsible for issuing and managing the Uzbekistan Sum.
Established in 1991, the central bank’s main functions include implementing monetary policy, overseeing the country’s financial system, and maintaining the stability of the currency.
The Central Bank also plays an active role in promoting financial literacy and fostering economic development in the country.
Denominations and Subdivisions
The Uzbekistan Sum is subdivided into 100 tiyin.
Coins are issued in denominations of 1, 5, 10, 25, 50, 100, and 500 sum.
Banknotes are available in denominations of 1, 3, 5, 10, 25, 50, 100, 200, 500, 1000, 5000, 10,000, 50,000, and 100,000 sum.
Over the years, several commemorative coins have been issued to mark significant events and anniversaries.
Additionally, the design of banknotes has evolved to incorporate modern security features, making them more difficult to counterfeit.
Economy
Uzbekistan’s economy is based on a mix of agriculture, natural resources, and manufacturing.
Key industries include cotton, textiles, and food processing, with a significant portion of exports consisting of cotton and gold.
The country also has significant reserves of natural gas, copper, and uranium.
In recent years, Uzbekistan has been working to diversify its economy and reduce its reliance on commodities, focusing on sectors such as automotive, pharmaceuticals, and information technology.
The government has also implemented various economic reforms aimed at attracting foreign investment and improving the business environment.
The value of the Uzbekistan Sum can be influenced by economic factors such as inflation, interest rates, and the country’s overall economic performance.
The government and the Central Bank work together to maintain currency stability and manage inflation.
Exchange Rate and Convertibility
The exchange rate of the Uzbekistan Sum against other currencies is determined by market forces, reflecting supply and demand factors.
The Central Bank of Uzbekistan intervenes in the foreign exchange market to maintain stability and manage fluctuations in the exchange rate.
Until 2017, the Uzbekistan Sum operated under a fixed exchange rate regime, which was criticized for fostering a black market and limiting the country’s economic potential.
In September 2017, the government decided to switch to a more market-oriented exchange rate system, allowing the currency to float within a managed band.
This move has improved the country’s access to foreign investment and trade.
Summary
The Uzbekistan Sum (UZS) is the official currency of Uzbekistan , playing a crucial role in the country’s economic landscape.
With its history dating back to the post-Soviet era, the currency has undergone several changes to adapt to the evolving economy.
The Central Bank of the Republic of Uzbekistan is responsible for managing the currency, implementing monetary policy, and overseeing the financial system.
Since introducing the Sum, Uzbekistan has experienced periods of economic instability, inflation, and currency fluctuations.
In response, the government has implemented reforms, including moving from a fixed exchange rate regime to a more flexible, managed floating exchange rate system.
These measures have contributed to increased foreign investment, trade, and overall economic growth.
Today, the Uzbekistan Sum is available in a range of denominations for both coins and banknotes, reflecting the needs of a modern economy.
As Uzbekistan continues to diversify its industries and pursue economic development, the Sum will remain an integral part of the country’s financial landscape, with its value influenced by a variety of domestic and international factors.