The September 2017 sum float and the end of Uzbekistan's multiple exchange rates

On September 5, 2017, the Central Bank of Uzbekistan unified the country's exchange rates and moved to what President Mirziyoyev's government described as exclusive use of market mechanisms to determine the som's value, setting the rate at about 8,100 som per dollar compared with the prior official rate of roughly 4,210, a devaluation of close to 50 percent. Restrictions preventing households and firms from freely converting currency were lifted at the same time. The central bank had tightened policy ahead of the move, raising its refinancing rate from 9 to 14 percent to contain the inflationary pass-through it expected once the som was allowed to find a market level. The International Monetary Fund's subsequent Article IV consultation noted that the reform, paired with the lifting of a wide range of administered prices and trade restrictions, marked the most significant turning point in Uzbekistan's post-Soviet economic management. On the country's indicator charts, 2017 is the year inflation and the exchange rate stop looking artificially flat and begin reflecting a genuinely market-determined currency, with the som continuing to depreciate gradually in the years that followed as the central bank shifted toward inflation targeting.