Somaliland: the government struggles to solve currency depreciations and inflation as markets close down
Tuesday January 24, 2017 - 16:48:26 in News by Jama Ahmed
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Hargeisa- Depreciation of local currency and inflation forced markets in Hargeia, the capital of Somaliland, and Berbera, the port city, to close down.
In an extra-ordinary cabinet meeting, the government issued a decision intended to tackle depreciation of Shillings that trembled the economy. The government banned transections in mobile money less than 100 US Dollar.
The mobile money is widely used in Somaliland in US Dollars. The government said the usage of the mobile money plays big role in the depreciation.
"We are ordering the money exchangers to exchange the 1 US Dollars in 7, 000 Shillings,” the Minister of Presidency said.
"Avoiding to enforce these orders will result criminal penalties,” he added.
Today, some of the biggest markets in Somaliland have closed down to protest against local currency depreciation.
Gobanimo, the second biggest markets in Hargeisa, the capital city of Somaliland, and Berbera main market have been closed as the depreciation of the local currency continues in unprecedented speed.
Affected by the inflation which the depreciation created, the business owners decided to shut down.
For the last couple of months Somaliland Currency has been depreciating swiftly from $1=7500 Shillings to $1= 9000 Shillings. Somaliland use both the Somaliland Shillings and the US Dollars for domestic transactions.
"The remittance from the Diaspora decreased, and livestock exports were suspended. These are the factors that caused shortage of US Dollars. These are the reasons of the deprecation. The government has not done anything wrong,” the Minister of Presidency argued.
The Chairman of the Association of the Money Exchangers blamed the government officials for the depreciation of Somaliland Shilling.
Speaking in this week before the Upper House of the Parliament (Guurti), he said "the government is not using Somaliland Currency. It collects tax revenues in US Dollars which increased the demand of Dollars. The salaries are paid in Shillings rate but are distributed in Dollars.”
About the author
Jama Ahmed Jama is the Editor-in-Chief of Somaliland Daily