Sheikh Mountains of Somaliland
Somaliland shilling falls against the dollar
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.