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Tuesday, January 8, 2013

Somalia keen on reintroducing higher currency denominations

By ABDULKADIR KHALIF
Special Correspondent

In Summary

  • Hope of reviving the Somali shilling was renewed when President Hassan Sheikh Mohamud met with his Sudanese counterpart Omar al-Bashir on Wednesday.
  • Sudan is going to keep the Somali currency it had printed in the past until Somalia’s financial institutions are ready to use the money.
  • Three years ago, Sudan began printing the Somali shilling upon the request of the TFG though no deliveries were ever made.

Somalia's economy will soon enjoy the benefits of trading in several denominations of the Somali shilling.

The country — which is in the process of reconstruction after two decades of civil war — has been trading in US dollars after its currency lost value due to the instability.

The 5, 10, 20, 50 and 100 shilling notes became worthless after heavy depreciation when the central government of the late Gen Mohamed Siad Barre collapsed.

Though the 500 and 1,000 denominations survived, only the 1,000 shilling note is currently used.

Hope of reviving the Somali shilling was renewed when President Hassan Sheikh Mohamud met with his Sudanese counterpart Omar al-Bashir on Wednesday.

Speaking to the media in Khartoum, Somalia’s Interior Minister Abdikarim Hussein said the leaders discussed ways in which the two countries could advance their collaboration in matters of education and peace.

The minister said that Sudan was going to keep the Somali currency it had printed in the past until Somalia’s financial institutions are ready to use the money.

“Somalia and Sudan agreed that the Somali shillings printed for the former Transitional Federal Government (TFG) are kept in safe custody by Sudan until the financial organs in Somalia are fully empowered,” said the minister.

Three years ago, Sudan began printing the Somali shilling upon the request of the TFG though no deliveries were ever made.

The money printed in Sudan in various denominations, which include shillings 1,000, 2,000, 5,000, 10,000, 20,000 and 50,000 is expected to replace the almost worthless currency left by Somalia’s last stable government.

Despite the need to have the currency in several denominations, there have been conflicting views on whether the money should be returned. Some critics say the reintroduction of the Somali shilling would mess up the financial system.

State organs dealing with money, like the almost paralysed Central Bank of Somalia, need to be revived before the currency can be reintroduced.

President Mohamud asked the Sudanese leader to help this new government until the country reaches a stage of self-reliance.

He also met with the larger Somali community living in Sudan and discussed ways to empower Somali government institutions.

Source: The East African

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