The authorities will continue to target a slow pace of nominal depreciation in order to support export competitiveness. However, the rate of depreciation will be faster than in recent years. A global weakening of emerging-market currencies against the US dollar in late 2008 and early 2009, owing to greater risk aversion, resulted in an acceleration of the trend of som depreciation. The Uzbek currency was also affected by contagion from the steep falls in the Russian rouble and the Kazakh tenge. The pace of depreciation slowed in mid-2009 as global risk appetite returned, but picked up again in 2010, as increasing instability in the region (particularly in the Kyrgyz Republic) raised concerns about the security situation in Central Asia. By end-May 2011 the som had depreciated by a cumulative 24.6% since end-September 2008. We expect the official exchange rate to be around Som1,896:US$1 by the end of 2012, compared with Som1,638:US$1 at end-2010, a fall of about 13.5%.