Somali shilling

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Somali shilling
Shilin Soomaali (Somali)
الشلن الصومالي (Arabic)
252px
500 Somali shilling banknote.
ISO 4217 code SOS
Central bank Central Bank of Somalia
 Website www.centralbank.gov.so
User(s)  Somalia
Inflation N/A (1989)[1]
Subunit
 1/100 Senti
Symbol Sh.So.[2]
Coins 1, 5, 10, 50 Senti, 1, 5, 10, 25 Shillings
Banknotes 5, 10, 20, 50, 100, 500, 1000 shillings

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

Overview

Early history

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Main articles: East African shilling, Italian Somaliland rupia, Italian Somaliland lira, and Somali somalo
A 5 Somali shilling banknote, issued in 1987.

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 independence in 1960, the somalo of Italian Somaliland and the East African shilling (which were equal in value) were replaced at par in 1962 by the Somali shilling. Names used for the denominations were cent (singular: centesimo; plural: centesimi) and سنت (plural: سنتيمات and سنتيما) together with shilling (singular: scellino; plural: scellini) and شلن.

Banknotes

On 15 December 1962, the Banca Nazionale Somala (National Bank of Somalia) issued notes denominated as 5, 10, 20 and 100 scellini/shillings.[3] 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. Also in 1990 there was an attempt to reform the currency at 100 to 1, with new banknotes of 20 and 50 new shilin prepared for the redenomination.[4]

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 products 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
A 10 senti coin, issued in 1976.

Coins

In terms of coins, the East African shilling and somalo initially circulated. 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 the 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

Unregulation

Following the breakdown in central authority that accompanied the civil war, which began in the early 1990s, the value of the Somali shilling was disrupted. 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 Somaliland territory, subsequently emerged. These included the Na shilling, which failed to gain widespread acceptance, and the Balweyn I and II, which were forgeries of pre-1991 bank notes. Competition for seigniorage drove the value of the money 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 the devaluation from spiraling further. The pre-1991 notes and the subsequent forgeries were treated as the same currency. It took large bundles to make cash purchases,[5] and the United States dollar was often used for larger transactions.[5]

Somaliland shilling

The Somaliland shilling is the official currency of Somaliland, a self-declared republic that is internationally recognized as an autonomous region of Somalia.[6] The currency is not recognized as legal tender by the international community, and it currently has no official exchange rate. It is regulated by the Bank of Somaliland, the territory's central bank and Somaliland people .[7]

Regulation

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Main article: Central Bank of Somalia

In the late 2000s, Somalia's newly established Transitional Federal Government revived the defunct Central Bank of Somalia. In terms of financial management, the monetary authority is in the process of assuming the task of both formulating and implementing monetary policy.[8] Owing to a lack of confidence in the Somali shilling, the U.S. dollar is widely accepted as a medium of exchange alongside the Somali shilling. Dollarization notwithstanding, the large issuance of the Somali shilling has 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.[8]

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 have 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.[9]

Historical exchange rates

Free market rates in Somalia:

  • 2000 SOS/USD in June 1991
  • 5000 SOS/USD in June 1993
  • 13,400 SOS/USD in March 2006
  • 14,406 SOS/USD in August 2006[10]
  • 15,000 SOS/USD in February 2007
  • 25,000 SOS/USD in March 2008[11]
  • 35,000 SOS/USD in July 2008[12]
  • 28,250 SOS/USD in March 2009[13]
  • 33,300 SOS/USD in February 2010[14]
  • 27,000 SOS/USD in October 2011[14]
  • 19,000 SOS/USD in December 2012[15]
  • 15,000 SOS/USD in May 2013[16]
  • 1,001 SOS/USD in March 2014[9]
  • 725 SOS/USD in December 2014[17]
  • 697.5 SOS/USD in April 2015[18]
Current SOS exchange rates
From Google Finance: AUD CAD CHF EUR GBP HKD JPY USD
From Yahoo! Finance: AUD CAD CHF EUR GBP HKD JPY USD
From XE: AUD CAD CHF EUR GBP HKD JPY USD
From OANDA: AUD CAD CHF EUR GBP HKD JPY USD
From fxtop.com: AUD CAD CHF EUR GBP HKD JPY USD
From Currency.Wiki: AUD CAD CHF EUR GBP HKD JPY USD

See also

Notes

  1. ↑ The World Factbook
  2. ↑ Central Bank of Somalia. Accessed on 24 February 2011.
  3. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  4. ↑ Somalbanca - Currency
  5. ↑ 5.0 5.1 Lua error in package.lua at line 80: module 'strict' not found.
  6. ↑ Somaliland’s Quest for International Recognition and the HBM-SSC Factor
  7. ↑ Time for Somaliland to Rethink its Strategy
  8. ↑ 8.0 8.1 Central Bank of Somalia - Monetary policy
  9. ↑ 9.0 9.1 Lua error in package.lua at line 80: module 'strict' not found.
  10. ↑ http://www.un.org/Depts/treasury/index.html
  11. ↑ http://africa.reuters.com/business/news/usnBAN946551.html Reuters Africa 2008/03/19 Accessed 2008/04/09
  12. ↑ http://www.hiiraan.com/print2_op/2008/july/the_new_tsunami_in_somalia_inflation.aspx The new tsunami In Somalia (inflation) 2008/07/28
  13. ↑ http://www.reliefweb.int/rw/rwb.nsf/db900sid/EGUA-7R5P9X/$File/full_report.pdf
  14. ↑ 14.0 14.1 http://www.somalbanca.org/exchange-rates.html
  15. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  16. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  17. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  18. ↑ Lua error in package.lua at line 80: module 'strict' not found.

References

  • CIA World Factbook - Somalia
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External links

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 widely recognized
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