The Somali shilling ( sign: Sh.So.; ; ; ; ISO 4217: SOS) is the official

currency A currency is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general definition is that a currency is a ''system of money'' in common use within a specific envi ...

Somalia Somalia, officially the Federal Republic of Somalia, is the easternmost country in continental Africa. The country is located in the Horn of Africa and is bordered by Ethiopia to the west, Djibouti to the northwest, Kenya to the southwest, th ...

. It is subdivided into 100 ''senti'' (Somali, also ), ''cents'' (English) or (Italian).

Overview

Early history

The

shilling The shilling is a historical coin, and the name of a unit of modern currency, currencies formerly used in the United Kingdom, Australia, New Zealand, other British Commonwealth countries and Ireland, where they were generally equivalent to 1 ...

has been the currency of parts of Somalia since 1921, when the

East African shilling The East African shilling was the Pound sterling, sterling unit of account in British Empire, British-controlled areas of East Africa from 1921 until 1969. It was issued by the East African Currency Board. It is also the proposed name for a com ...

was introduced to the former

British Somaliland British Somaliland, officially the Somaliland Protectorate (), was a protectorate of the United Kingdom in modern Somaliland. It was bordered by Italian Somalia, French Somali Coast and Ethiopian Empire, Abyssinia (Italian Ethiopia from 1936 ...

protectorate A protectorate, in the context of international relations, is a State (polity), state that is under protection by another state for defence against aggression and other violations of law. It is a dependent territory that enjoys autonomy over ...

. Following the 1960 independence and unification of the former territories of

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. 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. Printed in

Sudan Sudan, officially the Republic of the Sudan, is a country in Northeast Africa. It borders the Central African Republic to the southwest, Chad to the west, Libya to the northwest, Egypt to the north, the Red Sea to the east, Eritrea and Ethiopi ...

in 2010 never issued. SOM003

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 The Somali Democratic Republic (; , ; ) was a socialist state in Somalia that existed from 1969 to 1991. Established in October 1969, the Somali Democratic Republic emerged following a 1969 Somali coup d'état, coup d'état led by Major General ...

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 one pound sterling, making the Somali shilling equivalent to the British shilling. 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. 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. U.S. dollars in the black market usually traded at a premium to the official exchange rate. 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 A civil war is a war between organized groups within the same Sovereign state, state (or country). The aim of one side may be to take control of the country or a region, to achieve independence for a region, or to change government policies.J ...

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, 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, and the

United States dollar The United States dollar (Currency symbol, symbol: Dollar sign, $; ISO 4217, currency code: USD) is the official currency of the United States and International use of the U.S. dollar, several other countries. The Coinage Act of 1792 introdu ...

was often used for larger transactions.

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. 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. 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 Bloomberg may refer to: People * Daniel J. Bloomberg (1905–1984), audio engineer * Georgina Bloomberg (born 1983), professional equestrian * Michael Bloomberg (born 1942), American businessman and founder of Bloomberg L.P.; politician a ...

, rising close to 50 percentage points higher than the next most robust global currency over the same period. 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: *7 SOS/USD in 1970 *30 SOS/USD in 1980 *100 SOS/USD in 1985 *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 *15,000 SOS/USD in February 2007 *25,000 SOS/USD in March 2008 *35,000 SOS/USD in July 2008 *28,250 SOS/USD in March 2009 *33,300 SOS/USD in February 2010 *27,000 SOS/USD in October 2011 *19,000 SOS/USD in December 2012 *15,000 SOS/USD in May 2013 *20,000 SOS/USD in March 2014 *22,000 SOS/USD in December 2014 *23,000 SOS/USD in April 2015 *26,000 SOS/USD in May 2025

Notes

References

CIA World Factbook - ''Somalia''
* * *

External links

{{Portal bar, Africa, Money, Numismatics, Somalia Currencies of Somalia Currencies introduced in 1962 Shillings Currencies of Africa Circulating currencies