Currency risk for investors: soʻm and US dollar

Many families in Uzbekistan think about savings in two currencies at once: they earn and spend in soʻm, and they keep part of their savings in US dollars. That makes the exchange rate one of the biggest drivers of what their savings are really worth. This guide explains what currency risk is, how it changed returns in recent years according to official Central Bank of Uzbekistan (CBU) figures, and how to think about it when you choose between soʻm and dollar investments.

What currency risk means

Currency risk is the chance that a change in the exchange rate reduces the value of your money in the currency you care about. The key question is: in which currency will you spend this money?

• If you will spend it in Uzbekistan, on rent, food, school fees or a flat, your "home" currency is the soʻm. A dollar deposit carries currency risk for you, because its value in soʻm moves with the rate.
• If you are saving for something priced in dollars, such as study abroad or an imported car, the risk runs the other way. A soʻm deposit carries currency risk, because the dollar may become more expensive.

Neither currency is risk-free for everyone. The risk depends on what you are saving for.

What the official rates show

The CBU publishes the official exchange rate of the soʻm against foreign currencies every working day, together with an archive of past rates, on cbu.uz. Here are the official US dollar rates at the end of each recent year, taken from that archive on 26 September 2026:

• 30 December 2022: 11,225.46 UZS per US dollar
• 29 December 2023: 12,338.77 UZS
• 27 December 2024: 12,920.48 UZS
• 30 December 2025: 12,025.33 UZS
• 26 September 2026: 11,825.40 UZS

From these figures, the dollar rose by about 9.9% against the soʻm during 2023 and by about 4.7% during 2024, then fell by about 6.9% during 2025, and by a further 1.7% between the end of 2025 and 26 September 2026. These are past movements only. They show that the rate can move in both directions and say nothing about what it will do next.

You can see the full daily history for each currency on Finmind's currencies page, which charts the CBU's official rates.

A worked example: two savers

The following uses the official rates above. The deposit rates are illustrative and are not quotes from any bank.

Saver A had 129,204,800 UZS at the end of 2024 and converted it at the official rate of 12,920.48 into 10,000 US dollars, then placed it in a dollar deposit at an illustrative 4% a year. After one year she had 10,400 dollars. Converted back at the end-2025 official rate of 12,025.33, that is about 125,063,000 UZS. In soʻm terms she ended the year about 3.2% poorer, because the dollar's fall outweighed the interest.

Saver B kept the same 129,204,800 UZS in a soʻm deposit at an illustrative 18% a year, and had about 152,461,700 UZS a year later, a gain of 18% in soʻm.

Now reverse the period. Over 2023, a soʻm saver still earned only the deposit rate, while a dollar saver also gained the 9.9% rise of the dollar. That year, the dollar deposit looked much better in soʻm terms. The lesson is not that one currency always wins, but that the exchange rate can easily be as large as the interest rate itself.

The break-even rate

A useful way to compare a soʻm investment with a dollar one is to ask how much the dollar would need to rise for the two to end up equal.

With illustrative rates of 18% in soʻm and 4% in dollars, the break-even is:

(1 + 0.18) ÷ (1 + 0.04) − 1 ≈ 13.5%

If the dollar rises by more than about 13.5% against the soʻm over the year, the dollar deposit wins in soʻm terms. If it rises by less, stays flat or falls, the soʻm deposit wins. Doing this sum with real rates from your own bank turns a vague feeling about the currency into a concrete question you can think about.

Remember two costs this simple formula leaves out:

• The exchange spread. Banks buy and sell currency at different rates, and both differ from the CBU's official rate. Converting into dollars and back can cost you a noticeable share before any interest is earned. Finmind's FX page compares the buy and sell rates banks publish next to the official rate.
• Inflation. A soʻm return has to be compared with soʻm inflation, which is what our guide to inflation and your savings is about.

Where currency risk hides in a portfolio

Currency risk is not only about deposits.

• UZSE shares are priced in soʻm, but a company's profits may depend on the exchange rate. An exporter can benefit when the soʻm weakens, while a company that imports raw materials or has debt in foreign currency can suffer.
• Bonds in soʻm pay soʻm coupons. Their value to a dollar-based saver falls when the soʻm weakens.
• Foreign assets, if you hold any through a broker abroad, add the opposite exposure.

The wider link between the economy and exchange rates is covered in GDP and exchange rates for investors.

Practical ways to manage currency risk

1. Match currency to the goal. Money you will spend in soʻm is usually safest measured in soʻm; money for a dollar-priced goal can reasonably be held in dollars.
2. Split rather than bet. Holding part of your savings in each currency means you are never entirely on the wrong side. This is the same idea as the diversification of any portfolio.
3. Convert gradually. If you need to move a large sum from one currency to another, doing it in several steps spreads the risk of a bad day.
4. Count the spread. Frequent back-and-forth conversions can lose more to bank spreads than they gain.
5. Use official data. Check the rate history on cbu.uz rather than relying on rumours about where the rate is heading.

This article is for education only and is not investment advice. Investing in securities involves risk, including the loss of money you invest.