Understanding Somalia Currency History and Evolution

Somalia has a rich history of currency, with the first official currency being introduced in the 1920s by the Italian colonial administration.

The Somali shilling was pegged to the Italian lira and was used as the primary currency until Somalia gained independence in 1960.

Prior to this, various forms of currency were used, including the East African shilling, which was introduced in the 1950s.

The Somali shilling has undergone several changes since its introduction, with the first series of banknotes being issued in 1962.

For more insights, see: Somalia Currency to Dollar

The Central Bank of Somalia is responsible for formulating and implementing monetary policy, a task it took on in the late 2000s. This led to a significant improvement in the value of the Somali shilling, which appreciated by almost 60% against the U.S. dollar over the previous 12 months by March 2014.

The large issuance of the Somali shilling was a major contributor to price hikes, especially for low-value transactions. Dollarization, where the U.S. dollar was widely accepted as a medium of exchange alongside the Somali shilling, did not entirely eliminate the inflationary environment.

The Central Bank of Somalia expects to address this issue and assume full control of monetary policy, replacing the presently circulating currency introduced by the private sector.

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In the absence of a central authority, the value of the Somali shilling plummeted to about $0.04 per ShSo (1000) note.

The Central Bank of Somalia shut down operations, leading to a breakdown in the monetary system.

Rival producers of the local currency emerged, including autonomous regional entities like the Puntland territory.

These currencies included the Na shilling, which failed to gain widespread acceptance.

The Balweyn I and II were forgeries of pre-1991 bank notes, but consumers treated them as the same currency.

Large bundles of bills were needed to make cash purchases, and the US dollar was often used for larger transactions.

Consumers refused to accept bills larger than the 1991 denominations, which helped to stabilize the currency.

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In the late 2000s, Somalia's Transitional Federal Government revived the Central Bank of Somalia, giving it control over monetary policy.

The new Central Bank of Somalia had to deal with a lack of confidence in the Somali shilling, which led to the U.S. dollar being widely accepted as a medium of exchange.

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Dollarization didn't eliminate inflation, however, and the large issuance of the Somali shilling fueled price hikes, especially for low-value transactions.

The new Central Bank of Somalia expects to end this inflationary environment once it assumes full control of monetary policy and replaces the private sector's currency.

As security in Somalia improved, Somali expatriates began investing in the country, and foreign investment also increased, causing the Somali shilling to appreciate in value.

By March 2014, the Somali shilling had increased by almost 60% against the U.S. dollar over the previous 12 months.

The National Bank of Somalia, responsible for regulating the circulation of the Somali shilling, plays a crucial role in maintaining the currency's stability.

The Somali shilling was the strongest among the 175 global currencies traded by Bloomberg in March 2014, rising close to 50 percentage points higher than the next most robust global currency over the same period.

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Somalia's currency history is a complex and tumultuous tale. The East African shilling was introduced to Somalia in 1921, but it wasn't until 1962 that the Somali shilling replaced it at a par value.

The Somali shilling's value began to fluctuate wildly after the 1991 civil war. By June 1991, it had dropped to 2,000 SOS/USD, and by June 1993, it had plummeted to 5,000 SOS/USD.

Here's a breakdown of the Somali shilling's value over the years:

The US dollar eventually became the accepted medium of exchange for large transactions, and by 2014, the Somali shilling had gained 60% against the USD.

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The Somali shilling has a long and complex history, with various banknotes being introduced over the years. The first banknotes were issued in 1962 by the Banca Nazionale Somala, denominated as 5, 10, 20, and 100 shillings.

These early banknotes were followed by new issues from the Somali National Bank in 1975, and the Central Bank of Somalia in 1978. The denominations remained the same, but the design and name of the banknotes changed.

In 1983, the Central Bank of Somalia introduced 50 shilling notes, which were later followed by 500 shilling notes in 1989 and 1000 shilling notes in 1990. An attempt was made in 1990 to reform the currency at a rate of 100 to 1, with new banknotes of 20 and 50 new shillings prepared for the redenomination.

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Here's a list of some of the banknotes that were issued:

The attempt to reform the currency in 1990 was unsuccessful, and only the 1000 shilling note remains in circulation today.

In Somalia, the currency has had a tumultuous history. The East African shilling was introduced in 1921, but it wasn't until 1962 that the Somali shilling replaced it at a par value.

The Somali shilling's value was relatively stable until the 1991 civil war began. By June 1991, its value had dropped to 2,000 SOS/USD.

Free-market rates in Somalia have fluctuated wildly over the years, with the Somali shilling's value plummeting to 5,000 SOS/USD by June 1993.

Here are some key historical exchange rates in Somalia:

The Somali shilling's value continued to fluctuate, but by 2014 it had risen by 60% against the US dollar.

If you're interested in tracking the fluctuations of the Somali Shilling against the US Dollar, you can view rates for specific years by clicking on the links below.

The Somali Shilling has been fluctuating against the US Dollar for decades, with rates changing significantly over the years.

To view rates between the Somali Shilling and the US Dollar for a particular year, click on one of the links below.

Here are the years for which we have available data:

We can view the rates for these years by clicking on the corresponding link, providing us with a snapshot of the currency exchange rate at that time.