The som is the currency of Kyrgyzstan Explained
Ashly Chole Senior Finance Researcher
The som is the currency of Kyrgyzstan Table of Contents
The som is the currency of Kyrgyzstan
Kyrgyzstan's official currency is called the som, and you can see its name among the lines indicating the note's value on the reverse of banknotes. 1 som, 5 som, 10 som, and 25 som coins are available. 50, 100, 500, and 1000 som were the available banknote denominations. The State Mint and the State Bank of the Kyrgyz Republic both produced coins. A select few currencies, including the Kyrgyz som (KGS), have kept parity with their respective national currencies ever since they were introduced.
The currency that was launched in 1993 was the som
Both the ruble and the kyryl (named after Kyrgyzstan's second president) were replaced by the new currency when it was established in 1993. Each note has a serial number inscribed on the reverse along with text indicating its value in order to distinguish between different denominations of notes with various pictures. Each of the 100 tyiyn made up one som. The reverse of the 5 tosom banknote depicts the Bishkek building that houses the government's presidential office, while the opposite side contains a picture of a past president.
Banknotes
Just the $50, $100, 500, and $1,000 bills were in use. The Republic of Kyrgyzstan's State Mint printed these. Each note had an image on its front and a name inscribed on its reverse. There are no immediate plans to issue new banknotes since doing so would be prohibitively expensive due to the low demand among regular people who only occasionally or infrequently utilize currency in their daily lives. In order to prevent someone from taking advantage by selling anything at a false price, all values must be manually computed, which makes it challenging for anyone looking to get rid of old money before selling it. 1 US dollar is worth 82.7 gsd, and 1 euro is worth 1,200 gsd. Over 5.8 million people live in Kyrgyzstan. They are concentrated in the southern region close to the capital, while many also reside in Osh Province and other areas.
Kyrgyzstan is a landlocked country
Landlocked Kyrgyzstan is surrounded by China to the east, Kazakhstan to the north, Tajikistan to the south, and Uzbekistan to the west. Almost 80% of the people that live in Bishkek reside there. Since 1992, the som has been in circulation and is issued by the National Bank of Kyrgyzstan. The dollar has always been freely convertible, but the nation's inflation rate is fairly high and varies between 10% and 15%. Gold, aluminum ore, and other nonferrous metals like bismuth are among the most significant export commodities. China and Russia are its two largest import partners.
The Som currency code
The Kyrgyz som's currency code is KGS. One sum is equivalent to 10 centimes, or one tenth of a dollar. As of 2013, the online exchange rate (in the foreign exchange market) was 0.000721. The local currency's inability to keep pace with inflation rates and its volatility relative to other currencies have been reported by the Kyrgyzstani authorities. Each banknote, coin, or other piece of paper money will have a currency code on it that is used to identify the respective currency. Together with the currency code, the name of the nation, the location of its capital, and any other pertinent data should be included. While paying at a store or restaurant, this will make it simpler for you to identify the sort of money you are holding.
The Soviet Union continued to supply Soviet notes and coins to the central banks of the fourteen newly independent countries even though the political environment was hostile to maintaining a common currency. In the first half of 1992, there was a monetary union with 15 independent governments using the rouble, but each of them was issuing vast amounts of money in the form of credit. The Russian central bank responded by putting restrictions on the flow of credit between Russia and other nations. By the end of July 1993, the Central Bank of Russia had swapped currencies on Russian soil, initiating the rouble zone's eventual collapse and the introduction of the Kyrgyz som.
Following the fall of the Soviet Union
Although there were no official monetary policy changes made in conjunction with the dissolution of the Soviet Union, the Central Bank of Russia was permitted to take over the State Bank of the USSR and distribute Soviet banknotes and coins to the central banks of the fourteen newly independent countries. Maintaining a common currency requires a strong political consensus, a single institution responsible for achieving these objectives, and the barest amount of common law. These standards were not met due to the unpredictable political and economic climate.
Replacing the Soviet ruble
The Soviet ruble was phased out and replaced with the som. The American dollar, the German mark, and the Japanese yen were all part of the initial currency basket to which it was fixed. Nonetheless, in 2005, the Kyrgyz government ended this peg and allowed its currency to trade freely against foreign currencies.