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Hargeysa, Somaliland, March 21, 2009 – The
Somaliland Shilling (SlSh) has fallen against main foreign currencies
including the U.S. dollar in the last few days amid reports of newly
printed money arriving in the country.
The U.S. dollar rose by 8.57% against the SlSh in recent days. One U.S.
dollar currently buys around 7,000 Somaliland shillings, up from 6,400
few days ago. Traders say reduced availability of the U.S. dollar is
among the main reasons for the devaluation.
The plummeting Shilling also prompted a sudden rise in prices of the
basic foodstuffs in Hargeysa markets putting most food items beyond the
reach of the ordinary people.
An anticipation of a drop in value of the SlSh is believed to have
prompted businesses to hoard foreign currencies. Reports of the newly
printed money will surely worsen the economic problems in the country
and could derail attempts to stabilize the soaring inflation.
The drop in the value of the local currency historically accelerated
around the weeks before and after elections when the government spends
large sums of printed Somaliland shilling on its political campaign
activities.
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