The Central Bank of Somalia has announced plans to replace its bank notes, becoming the 3rd country to replace old bank notes after Kenya in 2019 and Nigeria in December 2022.
The move is aimed at counterfeit bills, excess cash in circulation and inflation. The bank will, however, only replace the high-value currency notes last printed in 1991 before the Civil War in Somalia. The bank first released the new banknote designs in 2018 with the aim of printing them the same year.
The old currency is almost extinct and the new issuance that will come into circulation next year will combat illicit funds and curb inflation by mopping up excess liquidity.
Somalia Rebuilding Capacity
The IMF has been also assisting the central bank with regulation and supervision of the financial sector to open it to new investors since 2018. It is also rebuilding capacity that has been hampered since the civil war began.
The central bank intends to open new branches in the capitals of all federal member states by June, including Garowe, Baidoa, and Kismayo.
Since the collapsing of Somalia’s government in 1991, the regulator maintained Treasury headquarters across the nation, where sorting of tax revenues and banknotes took place.
The branches will assist the central bank in collecting taxes, storing money, and serving as the federal states’ central fiscal agent.
The branches will also be responsible for maintaining the value of the new money that will be printed by central bank.
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