Somali shilling
  • Shilin Soomaali (Somali)
  • الشلن الصومالي (Arabic)
500 Somali shilling banknote.
ISO 4217
CodeSOS (numeric: 706)
Subunit0.01
Unit
SymbolSh.So.[1]
Denominations
Subunit
1100Senti, cents or centesimi
Banknotes5, 10, 20, 50, 100, 500, 1000, 5000, 10,000 shillings
Coins5, 10, 50 cents, 1 shilling
Demographics
User(s) Somalia
Issuance
Central bankCentral Bank of Somalia
 Websitewww.centralbank.gov.so

The Somali shilling (sign: Sh.So.; Somali: shilin; Arabic: شلن; Italian: scellino; ISO 4217: SOS) is the official currency of Somalia. It is subdivided into 100 senti (Somali, also سنت), cents (English) or centesimi (Italian).

Overview

Early history

Main articles: East African shilling, Italian Somaliland, and Somali somalo

The shilling has been the currency of parts of Somalia since 1921, when the East African shilling was introduced to the former British Somaliland protectorate. Following the 1960 independence and unification of the former territories of British Somaliland and Italian Somaliland, their respective currencies, the East African shilling and somalo (which were equal in value) were replaced at par in 1962 by the Somali shilling. Names used for its denominations were cent (singular: centesimo; plural: centesimi) and سنت (plural: سنتيمات), along with shilling (singular: scellino; plural: scellini).

Banknotes

On 15 October 1962, the Banca Nazionale Somala (National Bank of Somalia) issued notes denominated as 5, 10, 20 and 100 scellini/shillings.[2] In 1975, the Bankiga Qaranka Soomaaliyeed (Somali National Bank) introduced notes for 5, 10, 20 and 100 shilin/shillings. These were followed in 1978 by notes of the same denominations issued by the Bankiga Dhexe Ee Soomaaliya (Central Bank of Somalia). 50 shilin/shillings notes were introduced in 1983, followed by 500 shilin/shillings in 1989 and 1000 shilin/shillings in 1990. An attempt was made in 1990 to reform the currency at 100 to 1, with new banknotes of 20 and 50 new shilin prepared for the redenomination.[3]

Banknotes of the Somali shilling (1983-1996 issue)
Image Value Obverse Reverse
[1] 5 Somali shillings/Shilin Soomaali Water buffaloes Banana plantation
[2] 10 Somali shillings/Shilin Soomaali Abdul Aziz Mosque, Mogadishu Boat building
[3] 20 Somali shillings/Shilin Soomaali Bankiga Dhexe ee Soomaaliya (Central Bank of Somalia) Building, Mogadishu Cattle
[4] 50 Somali shillings/Shilin Soomaali Ruins of Xamar Weyne, Old Mogadishu Watering animals
[5] 100 Somali shillings/Shilin Soomaali A woman with a baby waving a rifle, shovel and a rake; "Muuqaalka Dhagaxtuur" (stone thrower) monument, Mogadishu Agricultural product processing factory
[6] 500 Somali shillings/Shilin Soomaali Fishermen Masaagidka Isbaheysiga ("Solidarity" or "Saudi" Mosque), Mogadishu
[7] 1000 Somali shillings/Shilin Soomaali Basket weavers Port and waterfront of Mogadishu
Banknotes of the Somali shilling (1991 Currency Reform issue)
Image Value Obverse Reverse
[8] 20 New Somali shillings/N-Shilin Soomaali Trader and a camel Cotton harvest
[9] 50 New Somali shillings/N-Shilin Soomaali Weaver Man with children on a donkey
Banknotes of the Somali shilling (2018 issue)
Image Value Obverse Reverse
5,000 Somali shillings/Shilin Soomaali Ruins of Xamar Weyne, Old Mogadishu Watering animals
10,000 Somali shillings/Shilin Soomaali Abdul Aziz Mosque, Mogadishu Boat building
Banknotes of the Somali shilling (2013 issue, printed in Sudan)
Image Value Obverse Reverse
10,000 Somali shillings/Shilin Soomaali Unknown design Three fish, coat of arms
20,000 Somali shillings/Shilin Soomaali Unknown design Trees, Central Bank of Somalia headquarters in Mogadishu, coat of arms
50,000 Somali shillings/Shilin Soomaali Mosque of Islamic Solidarity, Mogadishu Minaret of Abdul Aziz Mosque in Mogadishu, coat of arms
A 10 senti coin, issued in 1976.

Coins

Initially, the coins in circulation were those of the East African shilling and somalo currencies. In 1967, coins were issued in the name of the Somali Republic in denominations of 5, 10 and 50 cents/centesimi and 1 shilling/scellino. In 1976, when Somali names for the denominations were introduced, coins were issued in the name of the Somali Democratic Republic for 5, 10 and 50 senti and 1 shilling.

Modern history

Pre-civil war

The shilling was pegged to sterling at a rate of 20 shillings to £1 stg. In 1967, it switched its peg to the U.S. dollar on 18 November 1967, when sterling was devalued, giving an implied exchange rate of 1 dollar = 7.14286 shillings. On 28 August 1971, with the collapse of the Bretton Woods system, the shilling was valued at 0.124414 grams of gold. On 23 December 1971, it was repegged to the U.S. dollar, this time at a rate of 1 dollar = 6.57895 shillings. The shilling was devalued by 5% to 1 dollar = 6.92522 shillings on 8 January 1972. On 24 February 1973, the peg to the dollar became 6.23272 shillings.[4]

A dual rate system was established on 30 June 1981, with an official rate of 6.295 shillings to the U.S. dollar and a second exchange rate of 12.4654 to 12.7146 shillings to the dollar.

Somali currency underwent several devaluations:

Unregulation

Following the breakdown in central authority that accompanied the civil war beginning in the early 1990s, the value of the Somali shilling plunged. The Central Bank of Somalia, the nation's monetary authority, also shut down operations. Rival producers of the local currency, including autonomous regional entities such as the Puntland territory,[5] subsequently emerged. These currencies included the Na shilling, which failed to gain widespread acceptance, and the Balweyn I and II, forgeries of pre-1991 bank notes. Competition for seigniorage drove the value down to about $0.04 per ShSo (1000) note, approximately the commodity cost. Consumers also refused to accept bills larger than the 1991 denominations, which helped to stop devaluation from spiraling further upwards. The pre-1991 notes and subsequent forgeries were treated as the same currency. It took large bundles to make cash purchases,[6] and the United States dollar was often used for larger transactions.[6]

Regulation

Main article: Central Bank of Somalia

In the late 2000s, Somalia's newly established Transitional Federal Government revived the defunct Central Bank of Somalia. The monetary authority assumed the task of both formulating and implementing monetary policy.[7] Owing to a lack of confidence in the Somali shilling, the U.S. dollar was widely accepted as a medium of exchange alongside the Somali shilling. Dollarization notwithstanding, the large issuance of the Somali shilling increasingly fueled price hikes, especially for low-value transactions. The new Central Bank of Somalia expects this inflationary environment to come to an end as soon as the Central Bank assumes full control of monetary policy and replaces the presently circulating currency introduced by the private sector.[7]

With a significant improvement in local security, Somali expatriates began returning to the country for investment opportunities. Coupled with modest foreign investment, the inflow of funds helped the Somali shilling increase considerably in value. By March 2014, the currency had appreciated by almost 60% against the U.S. dollar over the previous 12 months. The Somali shilling was the strongest among the 175 global currencies traded by Bloomberg, rising close to 50 percentage points higher than the next most robust global currency over the same period.[8]

The United States dollar is still the main currency used in Somalia, with it being most prolific in electronic payments using SMS like EVC Plus.

Historical exchange rates

Free-market rates in Somalia:

Current SOS exchange rates
From Google Finance: AUD CAD CHF CNY EUR GBP HKD JPY USD ZAR
From Yahoo! Finance: AUD CAD CHF CNY EUR GBP HKD JPY USD ZAR
From XE.com: AUD CAD CHF CNY EUR GBP HKD JPY USD ZAR
From OANDA: AUD CAD CHF CNY EUR GBP HKD JPY USD ZAR

See also

Notes

  1. ^ Central Bank of Somalia. Accessed on 24 February 2011.
  2. ^ Linzmayer, Owen (2012). "Somalia". The Banknote Book. San Francisco, CA: www.BanknoteNews.com.
  3. ^ "CURRENCY". somalbanca.org. Retrieved 15 April 2018.
  4. ^ Archived September 10, 2005, at the Wayback Machine
  5. ^ "Somalia: Puntland faces worst Currency and Inflation crisis in its history". Garowe Online. Retrieved 2021-01-14.
  6. ^ a b Benjamin Powell; Ryan Ford; Alex Nowrasteh (November 30, 2006). "Somalia After State Collapse: Chaos or Improvement?" (PDF).
  7. ^ a b "Central Bank of Somalia - Monetary policy". somalbanca.org. Archived from the original on 25 January 2009. Retrieved 15 April 2018.
  8. ^ a b Derby, Ron (26 March 2014). "The curious tale of the world-beating Somali shilling". Financial Times. Retrieved 27 March 2014.
  9. ^ "The United Nations Operational Rates of Exchange". Archived from the original on 2001-01-22.
  10. ^ Reuters Reuters Africa 2008/03/19 Accessed 2008/04/09
  11. ^ http://www.hiiraan.com/print2_op/2008/july/the_new_tsunami_in_somalia_inflation.aspx The new tsunami In Somalia (inflation) 2008/07/28
  12. ^ http://www.reliefweb.int/rw/rwb.nsf/db900sid/EGUA-7R5P9X/$File/full_report.pdf[dead link]
  13. ^ a b "Exchange Rates". Archived from the original on 2010-03-08. Retrieved 2010-04-26.
  14. ^ "CBS Annual Report, 2012" (PDF). Central Bank of Somalia. Retrieved 27 July 2013.
  15. ^ "Exchange Rates". Central Bank of Somalia. Archived from the original on 28 July 2013. Retrieved 27 July 2013.
  16. ^ "Somali Shilling". Bloomberg. Retrieved 18 December 2014.
  17. ^ "Board of Directors". Central Bank of Somalia. Archived from the original on 18 May 2015. Retrieved 30 April 2015.

References

Preceded by:
Trust Territory of Somaliland somalo
Location: Trust Territory of Somaliland
Reason: independence and merging of British Somaliland and Italian Somaliland
Ratio: at par
Currency of Somalia
1962 – 1991
Note: the shilling was made the unit of account shortly after independence in 1960
Currency of Somalia
1991 –
Succeeded by:
Current
Preceded by:
East African shilling
Location: British Somaliland
Reason: independence and merging of British Somaliland and Italian Somaliland
Ratio: at par
Currency of Somaliland
1991 – 1994
Succeeded by:
Somaliland shilling
Reason: currency independence
Ratio: 1 Somaliland shilling = 100 Somali shillings = 1/50 United States dollar
Note: Somaliland is not internationally recognized