SomaliPress.com

Somali c.bank initiative to reinstate currency

Published on Saturday 29th March 2008

Nairobi, March 29: Somalia's embattled central bank plans to revamp the anarchic country's currency because of a flood of fake notes printed by warlords and businessmen.

 

Addressing donors meeting in neighbouring Kenya on Saturday, the bank's director general, Sharif Mohamed Hassan, said "greedy" individuals had pumped counterfeit cash into the market for years, driving the local unit to its lowest ever level. In 1990, Hassan said, the Somali shilling was worth around 930 to the dollar. But by 2001 it had fallen to 14,000, and now it has slumped to around 25,000 shillings per greenback, Reuters report said. "The present situation of counterfeit money is catastrophic," he said. "It's a priority to provide the market with a stock of new bank notes with good security features." The interim government, which has struggled to impose its authority on the Horn of Africa nation, must take drastic action against people importing and printing fake notes, he said. "Of course this is not easy, as the fake notes are printed in many areas that are not properly controlled," he added. The high volume of counterfeit bills is causing inflation and driving up food prices, he said, which aid workers warn is worsening one of the world's worst humanitarian disasters. More than 1 million Somalis are now internal refugees, and some 20,000 flee the capital Mogadishu every month to escape fighting between government forces and Islamist insurgents. Many displaced end up in areas suffering acute drought. "How can we talk of poverty reduction when prices have almost doubled in less than two years, in a country with one of the highest rates of unemployment on Earth?" Hassan asked. "It's heartbreaking and frustrating." He said Somalia's new bank notes would be produced by a "world renowned" money printer, but did not give a timetable. The central bank would decide at what rate they will be exchanged for the old bills, he told the meeting, which was organised by the United Nations and the World Bank. "Highest consideration will be given to minimising the loss to members of the public who have been victims of the greedy businessmen who introduced the counterfeit money," he said.