Day 77: Uzbek Currency

A rare moment with one of each denomination of local currency in my wallet at the same moment.  All this adds up to about $8.40.  Try not to spend it all at once!

UPDATE: Since this blog was first posted, Uzbekistan has also introduced a 100,000 сўм banknote.

The Uzbek сўм, or soʻm (pronounced sooom, like zoom, but with an “s”), is the national currency of the Republic of Uzbekistan.  With colorful banknotes depicting scenes of well known landmarks instead of leaders, this colorful currency is circulated in vast quantities due to its exchange rate compared to major world currencies.  It wasn’t so long ago in Uzbekistan that even routine purchases required a bag full of banknotes.  With a steadily increasing exchange rate over the past several years which was recently normalized at about 8,000 сўм to the dollar, it’s common for grocery items such as a 1kg of chicken to have a price tag of 25,000.

Now imagine our typical weekly grocery receipts which add up to about 300,000, and the largest available banknote until 2013 was just 1,000 сўм.  5,000s were rare until the past few years, so bundles of 1,000s in 100,000 сўм bricks were the norm even as recently as 2016.  Fortunately in just the past year, along with currency reforms, the Central Bank began issuing the first 10,000 сўм notes, and in August of 2017 introduced a 50,000 сўм note worth about $6.17.  For the first time ever, it’s now possible to make “large” purchases without carrying around bags of cash.

For the majority of our time here it simply hasn’t been practical to carry a wallet.  We each carry around a passport wallet due to identification requirements and spot checks when using the metro, but it’s only been in the past six months that I don’t feel there’s a need to haul around a few bricks of banknotes bundled together for emergencies.  Now I can comfortably carry as much as 500,000 сўм in my wallet without feeling like I’m sitting on a book, of course the passport does add some bulk.

While for the most part a cash based society, reforms in the past few years have been trying to encourage citizens to switch to card based payments for the majority of transactions.  The “UzCard” is now the prefered payment method for most only because salaries and pensions are mostly paid electronically instead of with cash.  UzCard terminals are present almost everywhere except the local bazaars, where only recently cash machines have been installed to help facilitate cash based transactions.

For major purchases, from cars to apartments, the preferred payment method is still by cash, either in сўм, or U.S. Dollars.  Since normalization of the currency market, dollars are not as coveted as they once were, which still means suitcases full of cash for the biggest purchases.  It’s not uncommon to hear about real estate transactions in cash with $100,000 worth of local currency being hauled in duffel bags.  That’s 800,000,000 сўм worth of 50,000 сўм banknotes.  Imagine counting out 16,000 individual banknotes… or 800,000 1,000сўм banknotes stacked in 8,000 individual bricks of 100,000 сўм.  It boggles the mind.

Fortunately for the casual traveler, the most you’ll ever have to worry about is changing a few hundred bucks here and there.  Any bank, and most international hotels are now able to change dollars to сўм for just about anyone.  The rate is fixed by the government with only about a 100сўм (1¢) difference between buying and selling.  It is not a good idea to try and change money with locals, or pay in U.S. Dollars for anything while traveling in Uzbekistan unless you are absolutely sure of the rate.  Since normalization of the currency market, there is no benefit to trying to change money unofficially.

The Uzbek сўм is also one of the most beautiful currencies of any country we’ve lived in.  The omnipresent greenback is downright dull in comparison.  The сўм is still most commonly circulated in banknote denominations of 1,000 and 5,000.  There simply isn’t that much of a reason for the average person to carry around anything larger than that for day to day transactions.  In a country where the average taxi fare is less than $2, why would any taxi driver carry around enough cash to make change for a 50,000 сўм banknote?

Other than the 1,000 and 5,000 сўм notes, you can still find the occasional 100, but they are quite rare.  200 and 500 сўм notes are quite tattered and worn from being in circulation so long, but most 10,000s and 50,000s are still quite crisp.  When changing money at the bank you might even get a stack of sequential serial numbers as the 50,000s are still being pumped into general circulation.

For the international tourist, things in Uzbekistan are for the most part pretty cheap compared to the rest of the world.  You won’t need to change a thousand dollars on arrival because it would be VERY hard to spend it all in a one week trip.  It’s also worth noting that unlike most other places in the world, there are no ATM machines to be found on the streets of Uzbekistan.  You might find one in the international hotels in Tashkent, but there’s no guarantee there’ll be any cash inside.

Uzbekistan is one of the few places left in the world where you’ll want to show up with as much cash as you plan to spend on your entire trip.  In nearly three years, we have never used our credit cards in-country.  Some places are beginning to accept electronic payments with international cards, but do so at your own risk, and don’t expect the transaction to go through.  Good luck explaining the transaction to your bank when they shut off your card for a suspicious transaction in Uzbek-a-where?

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