Historical Sketch

In 1865-1876, the Uzbek territories were annexed to the Russian Empire. They were combined to form the Turkestan General Governorate, but Bukhara and Khiva (Khorezm) retained independence under a protectorate. In the civil war after the 1917 Russian Revolution Soviet Turkestan emerged and joined the USSR in 1922 as Autonomous Soviet Republic of Turkestan, to which Bukhara and Khorezm were added two years later. In 1925, Turkestan was broken up and divided into the Soviet republics of Turkmenistan and Uzbekistan. Four years later, the eastern part of Uzbekistan was split off as Tajikistan. In 1991, Uzbekistan withdrew from the USSR and declared independence.

Monetary History Overview

After independence in 1991, Uzbekistan did not immediately introduce a national currency but continued to use the Russian Ruble. Initially, the country rather planned to join a monetary community with Russia and other successor states of the USSR, but this never came into being. The Russian demonetization of the Soviet paper money in July 1993 caused an inflow of the now obsolete notes into the neighboring states, such as Uzbekistan. To cope with the situation, in November 1993, an interim ("coupon") currency was introduced, the 1st Uzbek Som, which circulated in parallel with the Russian and Soviet notes until they got demonetized end-1993. The ties with the Russian Ruble was severed in April 1994, after which the coupon currency quckly depreciated against the already highly inflationary Russian currency. The transition ended in July 1994, when the 2nd Uzbek Som was established as (definitive) national currency. At transition, three zeros were cut, but the economic conditions ddi not change, such that the Som remained subject to a value decay at average annual rates of 35% for another decade. In the mid-2000s, after more than 95% of the value had gone, the decline slowed down but did not stop. In September 2017, a 48% devaluation was carried out which has at least slowed down the further value decay without really stabilizing the currency.

Uzbekistan joined the International Monetary Fund (IMF) on 21.09.1992.

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