Uzbeks may finally be able to trade their wheelbarrows for wallets.
Currently, Uzbekistan’s most valuable banknote is worth about $0.37. But on July 1 the Central Bank will release a 5,000-sum note, worth about $1.85 on the black market. Many hope the new bills will make life easier for shoppers who now carry around sacks of Uzbek cash to perform the simplest transactions.
The Central Bank announced its decision on June 27, after earlier denying reports of the new bills. Last time Uzbekistan introduced a new bill was in 2001, with the 1,000-sum note – the one that’s now worth about $0.37. (The official exchange rate stands at 2,093 sums to the dollar. Cash dollars are currently changing hands for slightly over 2,700 sums on the black market.)
Observers believe Uzbek authorities have been reluctant to put higher-denominated banknotes into circulation, fearing forgers would target the sum. Larger notes would also highlight decades of failure of Tashkent’s monetary policy. (In February, the BBC reported that Uzbekistan is home to the world’s most worthless coin, the tiyin, which is worth about 1/2000 of a US cent (at the official exchange rate)).
Uzmetronom.com – a site believed to be used to air leaks from Uzbekistan's security services – says that not only will the new banknotes save people from weighing bricks of cash on scales to complete transactions, but they will also help the Central Bank inventory cash by withdrawing worn, small-denomination notes.
Uzbekistan, where the official average salary stands at over 920,000 sums per month and apartments, cars and other routine goods often fetch millions of sums, must either redenominate its currency by removing zeros or issue a banknote with a face value of at least 500,000 sums, Uzmetronom recommended.
"However, the country's political leadership is very unlikely to make this decision because this will mean the acknowledgement of real, not [the official] statistical inflation, the absolute failure of the Uzbek currency and, finally, the failure of economic policy,” Uzmetronom said.
Sign up for Eurasianet's free weekly newsletter. Support Eurasianet: Help keep our journalism open to all, and influenced by none.