Somali Shilling (SOS)

What Is the Somali Shilling (SOS)?

The term Somali shilling (SOS) refers to the official national currency of Somalia. It is abbreviated as SOS in the foreign exchange market and is represented by the symbol Sh. The shilling is issued and managed by the country's central bank.

Banknotes are issued in denominations ranging from five to 1,000 shillings. One shilling is divided into 100 cents or senti, which range in value from one to 50 senti. There are also coins minted from one to 100 shillings.

Key Takeaways

  • The Somali shilling is the official national currency of Somalia.
  • The shilling is issued and managed by the Central Bank of Somalia.
  • SOS banknotes range in value from five to 1,000 shillings and coins are valued in 1 to 50 senti as well as one to 100 shillings.
  • Civil war and political unrest have led to wild fluctuations or volatility in the SOS exchange rate over its history.
  • Somalia's economy is highly dependent on agriculture and manufacturing.

Understanding the Somali Shilling (SOS)

Somalia is located in Northeast Africa and has used various currencies over the past century. The Somali shilling became legal tender throughout the country after Somalia gained independence from British and Italian rule. The somalo and East Africa shilling were replaced at par by the Somali shilling, making it the official currency of Somalia.

The currency is administered by Bankiga Dhexe Ee Soomaaliya or the Central Bank of Somalia, which was established in 1960. The bank's objectives are to foster monetary stability, maintain the internal and external value of the Somali shilling and promote credit and exchange conditions that contribute to the balanced growth of the economy.

Banknotes come in the following denominations: five, 10, 20, 50, 100, 500, and 1,000 shillings. Coins are produced in one, five, 10, and 50 senti (or cents) and one, five, 10, 20, 50, and 100 shillings.

Civil war and political unrest have led to wild fluctuations or volatility in the SOS exchange rate. Since the early 2000s, the SOS exchange rate has fluctuated between 550 SOS to one USD to over 3,000 SOS to one USD.

As of Aug. 2, 2022, US$1 was equal to 568.50 shilling.

Special Considerations

Although Somalia is an independent nation, it has been under duress from war and civil unrest, particularly in the 1990s. The economy was hit hard as a result of this time in the nation's history and it took its toll on the currency.

The local economy is dependent on agriculture and manufacturing, with products such as maize, bananas, sugar, and seafood accounting for a large amount of income. The most critical sector for Somalia is agriculture, with livestock accounting for approximately 40% of gross domestic product (GDP) and 50% of export earnings.

The country appears to be on a path of recovery as it has experienced a period of stability both politically and institutionally. There was a provisional constitution created in 2011 and the establishment of a federal government in 2012, followed by the creation of four new federal member states that have redrawn Somalia's federal map and created the space for political stability.

History of the Somali Shilling (SOS)

The SOS became the official national currency of Somalia in 1921. The central bank became the sole issuer of the shilling, according to the country's Central Bank Act. But this wasn't always the case.

By the first half of the 19th century, the country's currency was the Maria Theresa thaler, which was referred to as the sharuq by the country's citizens. Issued by the Austrian Empire, it was a coin made up of four parts silver and one part copper. Other countries, including Ethiopia and Eritrea, along with others in the Horn of Africa, also accepted this coin because of its high metal content.

The region used the Indian rupee (INR) during the 1890s along with the thalers and smaller baisa coins under Italy's rule. The Italian government introduced one centesimo and 25 centesimi coins in 1905 but they proved to be unsuccessful. They were replaced by the Italian rupee in 1909. Following the establishment of Italian East Africa in 1936, the area (which also included Ethiopia and Eritrea) began using the lira in denominations of 50, 100, 500, and 1000 lire.

The Indian rupee became legal tender after the British took control of the Somaliland Protectorate. The somalo and then the East Africa shilling became the region's default currency under the British military even though other currencies, like the rupee and thalers, were still accepted for transactions. These two currencies were eventually replaced by the Somali shilling at par.

Article Sources
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  1. PJ Symes. "The Bank Notes of Somalia."

  2. Central Bank of Somalia. "About the Bank."

  3. OANDA. "Somali Shilling."

  4. Investing.com. "USD/SOS - US Dollar Somali Shilling."

  5. CIA.gov. "The World Factbook. Somalia." Accessed Sept. 2, 2021.

  6. The World Bank. "The World Bank in Somalia."

  7. Central Bank of Somalia. "SOMALIA CURRENCY."

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