HARGEISA – The Bank of Somaliland has launched a series of financial reforms aimed at stabilising the local currency and modernising the region’s digital payments ecosystem, introducing a new official exchange rate and liberalising mobile money transaction limits for businesses.
The reforms, announced on Sunday, are the most significant monetary policy intervention in recent years. They come as the Somaliland shilling has faced persistent pressure on informal markets, and as the region seeks to deepen economic self-reliance despite lacking international recognition.
New Exchange Rate to Curb Informal Markets
The Bank has set a new official exchange rate of 11,000/11,100 Somaliland shillings per US dollar. The move is designed to dismantle the influence of informal currency markets and narrow the gap between the official and black-market rates by over 10 percentage points. According to the statement, the initiative is backed by a strategic injection of US dollar liquidity and close coordination with the Ministry of Finance.
The government had previously signalled its intention to intervene to address the depreciating shilling, with the cabinet being briefed on a plan from the Ministry of Finance and Economic Development.
Liberalising Mobile Money for Businesses
In a move to streamline digital commerce, the Bank is liberalising its policy on mobile money transactions. The country has long enforced a policy requiring all small mobile money transactions—those under 100 USD—to be conducted exclusively in Somaliland Shillings to foster greater reliance on the national currency.
The Bank is now removing the 100 USD transaction limit specifically for Person-to-Merchant (P2M) payments, allowing businesses and customers greater flexibility. For all other mobile money channels, such as personal transfers, the 100 USD threshold remains firmly in place.
The decision comes as the Central Bank continues to oversee the region’s digital financial landscape, having previously launched the country’s first e-Money services.
A Strategy for Long-Term Financial Stability
The reforms are part of a broader effort to eliminate currency arbitrage, enhance market transparency, and establish a more resilient foundation for Somaliland’s long-term financial future. The Bank of Somaliland has previously denied reports that it devalued the local currency and has stated that it has no plans to print new currency.
The announcement comes at a time when Somaliland’s fiscal stability has provided a foundation for growth, despite global economic pressures. The government has been working to attract investment, strengthen public financial management, and diversify the economy.
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