Replacing the Somali Shilling

[Rambie]

Somalia’s Central Bank governor wants creation and circulation of new currency from scratch, to replace the Somali Shilling which is less and less used.

The tattered shilling notes still in circulation – worth about 4 U.S Dollar cents – are emblematic of Somalia’s descent since 1991, when dictator Mohamed Siad Barre was toppled by warlords who carved up the country into personal fiefdoms, reports Reuters.

“We absolutely need a new currency,” said Ali, who this time became central bank governor in 2013, adding that the existing notes “are old, they’re torn, they’re dirty and they’re fake.”

With Somalia’s capital of Mogadishu changing fast and rapidly recovering from war, economic experts warn that Ali will need more than to just to just print new banknotes, as most Somalis currently use mobile money systems to carry out their daily business transactions in dollars.

Hotels in the capital have sprouted from the rubble since African Union troops wrested control of the city from al Shabaab Islamist militants in 2011. The Somali government, however, has struggled to build a financial system and pull the country’s 12 million people out of poverty.

[cheifaqilbari]

Good news, new currency to stabilize the economy.

[JSL3000]

Sounds like a quick money scheme.

[theyuusuf143]

There is Xabaalaha giinbaarta (Somalia shillings graveyard) in the outskirts of Burao where Somaliland burned 3 trillion Somalia shillings.

[NoAngst]

Sounds like a quick money scheme.

It doesn't really matter. It's the Somali State that is issuing it and that is all that matters.

So long as a state is the sovereign issuer of the currency and its debt is denominated in its own currency, there is no problem. It will no never go bankrupt or run out of money. And it can always print money to pay for things.

A problem would arise when there is too much money chasing too few goods and services hence resulting in inflation. But we already know Somalia is no where near that scenario as evidenced by the fact that the Somali Shilling last issued some 25 years ago is still in use except when it is impractical such as with large purchases.

[JSL3000]

Sounds like a quick money scheme.

It doesn't really matter. It's the Somali State that is issuing it and that is all that matters.

So long as a state is the sovereign issuer of the currency and its debt is denominated in its own currency, there is no problem. It will no never go bankrupt or run out of money. And it can always print money to pay for things.

A problem would arise when there is too much money chasing too few goods and services hence resulting in inflation. But we already know Somalia is no where near that scenario as evidenced by the fact that the Somali Shilling last issued some 25 years ago is still in use except when it is impractical such as with large purchases.

what the hell you talking about puntland prints somalia shilling whenever it wants to.

[NoAngst]

Guban,

Banks print money (actually they create with keystrokes on a keyboard) anytime they lend money. What's your point?

Printing money in of itself is not a problem. Only when money printed outstrips the stock of goods and services that the money can be purchased.

And you obviously don't know much about Somalis if you think they'll willingly accept crisp, newly created Somali shilling. Most Somalis back home know that last the time Somali Central Bank created Somali Shilling was around 1990.

[JSL3000]

^Let them print the money then what are you talking about?

You already answered the question what would happen inflation.

[AwRastaale]

https://www.facebook.com/Somalianpeace/ ... =2&theater