The som is the official currency of the Kyrgyz Republic, also known as Kyrgyzstan, a former republic of the Soviet Union. The som is subdivided into 100 tyiyn. The som was introduced in 1993, shortly after the breakup of the Soviet Union and the reestablishment of Kyrgyzstani independence. The name of the currency derives from the traditional word for currency in the Kyrgyz language, which translates into English as “pure.” Even when the Soviet ruble was the official currency, it was referred to locally as som, and the word was written on the back of ruble banknotes. The current Kyrgyzstani som is issued by the National Bank of the Kyrgyz Republic.
The Kyrgyzstani som was first introduced in 1993 at a rate of 1 som: 200 Soviet rubles. The currency was initially issued directly by the government, but that duty shifted to the National Bank of the Kyrgyz Republic when it was established on 29 July 1997. Kyrgyzstan’s central bank was formed with the primary duty of achieving and maintaining price stability. However, although the bank retains the right to implement monetary policy, it rarely does so, instead deferring to the economic policy of the government. Another function rarely performed by the bank is to regulate and supervise credit. Kyrgyzstani credit institutions are rarely used because of high interest rates and the traditional use of cash for most every type of transaction. The national bank also maintains foreign reserves, but as of 2004, foreign currency and gold reserves amounted to only A$459 million.
Kyrgyzstani som is circulated through a series of coins and banknotes. Coins are minted by the Kazakhstan mint in denominations of 10 and 50 tyiyn and 1, 3, 5 and 10 som. Banknotes are now in their third series and are printed in denominations of 1, 5, 10, 20, 50, 100, 200, 500, 1000 and 5000 som.
Kyrgyzstan is the second-poorest nation of Central Asia, next to Tajikistan. The average wage in the country is A$0.78 per hour and 40 percent of the population lives below the poverty line. In the 1990s, after the Soviet breakup, the GDP of the country dropped severely, but regained some footing in the last decade. However, the GDP dropped again by 3 percent in 2010. The primary industry of Kyrgyzstan is agriculture, followed by mining and textile manufacturing. The outlook of the Kyrgyzstani economy remains unfavourable and holding Kyrgyzstani som on the foreign exchange is considered very risky.