Somalia: Robust circulation in Puntland markets as Shilling declines sharply

BOSSASO, Somalia, November 18, 2015 (Garowe Online)-Printing of counterfeit shillings pushed Somali currency to new records as Puntland Finance Ministry has chosen tighter regulation to keep potential inflation at bay, Garowe Online reports.

On account of increasing demand for Somali shilling, mainly in the commercial port city and the state’s most populous town, security forces began turning away trucks loaded with considerable sacks of cash for business transactions.

Traders at Bossaso’s biggest cash exchange market tell Garowe Online that staggering shortage of US dollars in markets bothered most of businesses operating in a more volatile environment.

Credible sources have attributed flagging exchange rates and sharp depreciation of Somali currency to the magnitude of minted bank notes that continues to surpass US dollars.

Puntland government pays salaries of civil servants and security forces in newly printed Somali, while a lot is transacted in dollars.

“As a result of decreasing circulation of dollars, traders want to buy commodities offloaded in Bossaso at handsome rates in dollar, so Bossaso is where shilling can be exchanged for dollar,” a source said on condition of anonymity, adding that the government searches cars and trucks at security checkpoints for cash.

USD 100 was converted into a bleak So. Sh 2, 400,000.0 as of Wednesday.

Meanwhile, government officials and tycoons involved in the illicit printing of Somali shilling at cash factory still see percentages a ‘promising’.

GO learned that Deputy Parliament Speaker Abdihamid Sheikh Abdisalan was in part responsible for the commissioning, procurement and installation of note-printing plant.

The new currency gave pay rise to Puntland MPs who sidestepped any possible motion in parliament.

GAROWE ONLINE