Somali shilling
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).
500 Somali shilling banknote. | |
| ISO 4217 | |
| Code | SOS (numeric: 706) |
| Subunit | 0.01 |
| Unit | |
| Symbol | Sh.So.[1] |
| Denominations | |
| Subunit | |
| 1⁄100 | Senti |
| Banknotes | 5, 10, 20, 50, 100, 500, 1000, 5000, 10,000 shillings |
| Coins | 5, 10, 50 cents, 1 shilling |
| Demographics | |
| User(s) | Somalia |
| Issuance | |
| Central bank | Central Bank of Somalia |
| Website | www |
Overview
Early history
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) and شلن.
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 | ||
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:
- 1 July 1982: Peg with the SDR = 16.50 shillings (±7.5 band on 1 July 1983)
- 15 September 1984: Peg with the USD = 26 shillings (official rate)
- 1 January 1985: Peg with the USD = 36 shillings (official rate)
- 30 June 1985: Peg with the USD = 40.6083 shillings (official rate)
- 2 November 1985: Peg with the USD = 42.50 shillings (official rate)
- Somali shilling was devalued from 54.50 SOS/USD to 90.50 SOS/USD during 1986. There were multiple exchange rates.
- 12 October 1987: Peg with the USD = 100 shillings (official rate)
- By 29 December 1989, a U.S. dollar was exchanged for 924 shillings, in which it skyrocketed to 3,470 shillings by the end of 1990.
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
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:
- 2,000 SOS/USD in June 1991
- 5,000 SOS/USD in June 1993
- 13,400 SOS/USD in March 2006
- 14,406 SOS/USD in August 2006[9]
- 15,000 SOS/USD in February 2007
- 25,000 SOS/USD in March 2008[10]
- 35,000 SOS/USD in July 2008[11]
- 28,250 SOS/USD in March 2009[12]
- 33,300 SOS/USD in February 2010[13]
- 27,000 SOS/USD in October 2011[13]
- 19,000 SOS/USD in December 2012[14]
- 15,000 SOS/USD in May 2013[15]
- 20,000 SOS/USD in March 2014[8]
- 22,000 SOS/USD in December 2014[16]
- 23,000 SOS/USD in April 2015[17]
| Current SOS exchange rates | |
|---|---|
| From Google Finance: | AUD CAD CHF CNY EUR GBP HKD JPY USD GBP EUR JPY |
| From Yahoo! Finance: | AUD CAD CHF CNY EUR GBP HKD JPY USD GBP EUR JPY |
| From XE.com: | AUD CAD CHF CNY EUR GBP HKD JPY USD GBP EUR JPY |
| From OANDA: | AUD CAD CHF CNY EUR GBP HKD JPY USD GBP EUR JPY |
See also
Notes
- ^ Central Bank of Somalia. Accessed on 24 February 2011.
- ^ Linzmayer, Owen (2012). "Somalia". The Banknote Book. San Francisco, CA: www.BanknoteNews.com.
- ^ "CURRENCY". somalbanca.org. Retrieved 15 April 2018.
- ^ September 10, 2005, at the Wayback Machine
- ^ "Somalia: Puntland faces worst Currency and Inflation crisis in its history". Garowe Online. Retrieved 2021-01-14.
- ^ a b Benjamin Powell; Ryan Ford; Alex Nowrasteh (November 30, 2006). "Somalia After State Collapse: Chaos or Improvement?" (PDF).
- ^ a b . somalbanca.org. Archived from the original on 25 January 2009. Retrieved 15 April 2018.
- ^ a b Derby, Ron (26 March 2014). "The curious tale of the world-beating Somali shilling". Financial Times. Retrieved 27 March 2014.
- ^ . Archived from the original on 2001-01-22.
- ^ Reuters Africa 2008/03/19 Accessed 2008/04/09
- ^ http://www.hiiraan.com/print2_op/2008/july/the_new_tsunami_in_somalia_inflation.aspx The new tsunami In Somalia (inflation) 2008/07/28
- ^ http://www.reliefweb.int/rw/rwb.nsf/db900sid/EGUA-7R5P9X/$File/full_report.pdf[dead link]
- ^ a b . Archived from the original on 2010-03-08. Retrieved 2010-04-26.
- ^ "CBS Annual Report, 2012" (PDF). Central Bank of Somalia. Retrieved 27 July 2013.
- ^ . Central Bank of Somalia. Archived from the original on 28 July 2013. Retrieved 27 July 2013.
- ^ "Somali Shilling". Bloomberg. Retrieved 18 December 2014.
- ^ . Central Bank of Somalia. Archived from the original on 18 May 2015. Retrieved 30 April 2015.
References
- CIA World Factbook - Somalia
- Peter Symes (December 2005). "The Banknotes of Somalia – Part 4". Retrieved 2006-11-03.
- Krause, Chester L.; Clifford Mishler (1991). Standard Catalog of World Coins: 1801–1991 (18th ed.). Krause Publications. ISBN 0873411501.
- Pick, Albert (1994). Standard Catalog of World Paper Money: General Issues. Colin R. Bruce II and Neil Shafer (editors) (7th ed.). Krause Publications. ISBN 0-87341-207-9.
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 internationally recognized |