Somali shilling

Somali shilling
shilin soomaali (Somali)
Current 50 Somali shilling banknote.
ISO 4217 code	SOS
User(s)	Somalia
Symbol	Sh.So.[1]
Coins	1, 5, 10, 50 senti, 1, 5, 10, 20, 50, 100 shillings
Banknotes	5, 10, 20, 50, 100, 500, 1000 shillings
Central bank	Central Bank of Somalia
Website	somalbanca.org

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

Main articles: East African shilling and Somali somalo

A 10 shillin 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, centesimo (plural: centesimi) and سنت (plurals: سنتيمات and سنتيما) together with shilling, scellino (plural: scellini) and شلن.

Banknotes

In 1962, the Banca Nazionale Somala issued notes for 5, 10, 20 and 100 scellini/shillings. 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.^[2]

Coins

A 10 senti coin, issued in 1976.

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 shiling.

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,^[3] and the United States dollar was often used for larger transactions.^[3]

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.^[4] 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. Although the separatist authorities in Somaliland have attempted to bar usage of the Somali shilling, Somalia's official currency is still the preferred means of exchange for many peoples in the region.^[5]

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. In terms of financial management, the monetary authority is in the process of assuming the task of both formulating and implementing monetary policy.^[6] Owing to a lack of confidence in the Somali shilling, the US 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. This inflationary environment, however, is expected 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.^[6]

Historical exchange rates

Free market rates in southern 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^[7]
• 15,000 SOS/USD in February 2007
• 25,000 SOS/USD in March 2008^[8]
• 35,000 SOS/USD in July 2008^[9]
• 28,250 SOS/USD in March 2009^[10]
• 33,300 SOS/USD in February 2010^[11]

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 OzForex:	AUD CAD CHF EUR GBP HKD JPY USD
From XE.com:	AUD CAD CHF EUR GBP HKD JPY USD
From OANDA.com:	AUD CAD CHF EUR GBP HKD JPY USD

See also

• Economy of Somalia
• The History of British Currency in the Middle East

Notes

1. ^ Central Bank of Somalia. Accessed 24 Feb 2011.
2. ^ Somalbanca - Currency
3. ^ ^{a b} Benjamin Powell, Ryan Ford, Alex Nowrasteh (November 30, 2006). "Somalia After State Collapse: Chaos or Improvement?". http://www.independent.org/pdf/working_papers/64_somalia.pdf. 
4. ^ Somaliland’s Quest for International Recognition and the HBM-SSC Factor
5. ^ Time for Somaliland to Rethink its Strategy
6. ^ ^{a b} Central Bank of Somalia - Monetary policy
7. ^ http://www.un.org/Depts/treasury/index.html
8. ^ http://africa.reuters.com/business/news/usnBAN946551.html Reuters Africa 2008/03/19 Accessed 2008/04/09
9. ^ http://www.hiiraan.com/print2_op/2008/july/the_new_tsunami_in_somalia_inflation.aspx The new tsunami In Somalia (inflation) 2008/07/28
10. ^ http://www.reliefweb.int/rw/rwb.nsf/db900sid/EGUA-7R5P9X/$File/full_report.pdf
11. ^ http://www.somalbanca.org/exchange-rates.html

References

• CIA World Factbook - Somalia
• Peter Symes (December 2005). "The Banknotes of Somalia – Part 4". http://pjsymes.com.au/articles/somalia(part4).htm. Retrieved 2006-11-03. 
• Krause, Chester L. and Clifford Mishler (1991). Standard Catalog of World Coins: 1801–1991 (18th ed. 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

• Somalia at Islamic Banknotes
• Somaliland

Preceded by: Italian Somaliland somalo Location: Italian 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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