The Bank of Somaliland ( so, Baanka Somaliland, ) is the central bank of Somaliland.Somaliland’s Quest for International Recognition and the HBM-SSC Factor
Established in 1994, it serves as both a

monetary authority In finance and economics, a monetary authority is the entity that manages a country’s currency and money supply, often with the objective of controlling inflation, interest rates, real GDP or unemployment rate. With its monetary tools, a m ...

and

commercial bank A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit. It can also refer to a bank, or a division of a large bank, which deals with co ...

for the territory. The central bank was provided for in the

constitution of Somaliland The Constitution of the Republic of Somaliland ( so, Dastuurka Jamhuuriyadda Somaliland; ar, دستور جمهورية صوماليلاند) is the supreme source of national law of Somaliland, adopted by the Houses of the Parliament of So ...

. It has a head office in

Hargeisa Hargeisa (; so, Hargeysa, ar, هرجيسا) is the capital and largest city of the Republic of Somaliland. It is located in the Maroodi Jeex region of the Horn of Africa. It succeeded Burco as the capital of the British Somaliland Protector ...

, in addition to seven other branches, and four foreign exchange offices in the airports at Hargeisa,

Berbera Berbera (; so, Barbara, ar, بربرة) is the capital of the Sahil region of Somaliland and is the main sea port of the country. Berbera is a coastal city and was the former capital of the British Somaliland protectorate before Hargeisa. It ...

, Borama and

Gabiley Gabiley ( so, Gabiley, ar, غابيلي), also known as Gebiley, is a city in the Maroodi Jeex region of Somaliland. Gabiley is located 58 km west of Hargeisa, the capital of Somaliland. It is in the center of the Gabiley district, bounded ...

. The bank has 12 branches throughout the country.

History

In 1952, National Bank of India (NBI), which later merged with Grindlays Bank to form National and Grindlays Bank, established branches in

and

in what was then British Somaliland. NBI, the first bank in the protectorate, was the banker to the colonial government until in 1960 the

State of Somaliland The State of Somaliland (, ) was a short-lived independent country in the territory of present-day unilaterally declared Republic of Somaliland. It existed on the territory of former British Somaliland for five days between 26 June 1960 and 1 ...

(formerly British Somaliland) joined the

Trust Territory of Somalia The Trust Territory of Somaliland, officially the "Trust Territory of Somaliland under Italian administration" ( it, Amministrazione fiduciaria italiana della Somalia), was a United Nations Trust Territory situated in present-day Somalia. Its ca ...

(formerly Italian Somaliland) to form the

Somali Republic The Somali Republic ( so, Jamhuuriyadda Soomaaliyeed; it, Repubblica Somala; ar, الجمهورية الصومالية, Jumhūriyyat aṣ-Ṣūmālīyyah) was a sovereign state composed of Somalia and Somaliland, following the unification o ...

. After the bloodless

coup d'état A coup d'état (; French for 'stroke of state'), also known as a coup or overthrow, is a seizure and removal of a government and its powers. Typically, it is an illegal seizure of power by a political faction, politician, cult, rebel group, m ...

of 1969 that saw

Mohamed Siad Barre Mohamed Siad Barre ( so, Maxamed Siyaad Barre, Osmanya script: ; ar, محمد سياد بري; c. 1910 – 2 January 1995) was a Somali head of state and general who served as the 3rd president of the Somali Democratic Republic from 1969 to 199 ...

's ascension to power, in 1971 the government nationalized the four foreign banks. The government combined

Banco di Roma Banco di Roma was an Italian bank based in Rome, Lazio region. It was established on 9 March 1880. Along with Credito Italiano and Banca Commerciale Italiana they were considered as bank of national interests. In 1991 the bank was merged with Ba ...

Banco di Napoli Banco di Napoli S.p.A., among the oldest banks in the world, was an Italian banking subsidiary of Intesa Sanpaolo group, as one of the 6 retail brands other than "Intesa Sanpaolo". It was acquired by the Italian banking group Sanpaolo IMI (the p ...

, and National and Grindlays Bank to form the Somali Commercial Bank. The government also established the Somali Savings and Credit Bank to take over the commercial branches of Banca Nazionale Somala and Banque de Port Said, leaving the Banca Nazionale Somala with only central banking functions. The Somali Savings and Credit Bank had branches in Baidoa,

Beledweyne Beledweyne ( so, Beledweyne, ar, بلد وين, it, Belet Uen) is a city in central Somalia. Beledweyne District is the capital city of the Hiran region. The city is situated in the Shebelle Valley riverine near the Ethiopian border, 210 miles ...

Bosaso Bosaso ( so, Boosaaso, ar, بوصاصو), historically known as Bender Cassim is a city in the northeastern Bari province ('' gobol'') of Somalia. It is the seat of the Bosaso District. Located on the southern coast of the Gulf of Aden, the mu ...

Burco Burao, also spelt Bur'o or Bur'ao (; so, Burco, , ar, برعو) is the capital of the Togdheer region and the second largest city in Somaliland. Burao was also the third largest city of Somalia. Burao was the site of the declaration of an in ...

Galkacyo Galkayo ( so, Gaalkacyo, ar, جالكعيو Dr Badal Kariye Ba Bsit Ma Mba & Phd, ''The Kaleidoscopic Lover: The Civil War in the Horn of Africa & My Itinerary for a Peaceful Lover'', (AuthorHouse: 2010), p.116.) which in Af- Somali translates t ...

Qardho Qardho ( so, Qardho, ar, قرضو), also known as Gardo, is a city in the northeastern Bari region of Somalia, a district within the autonomous state of Puntland. History Until Somalia's Independence Qardho is one of a series of ancient settleme ...

and

Kismayo Kismayo ( so, Kismaayo, Maay: ''Kismanyy'', ar, كيسمايو, ; it, Chisimaio) is a port city in the southern Lower Juba (Jubbada Hoose) province of Somalia. It is the commercial capital of the autonomous Jubaland region. The city is situa ...

, and for a time also in

Djibouti Djibouti, ar, جيبوتي ', french: link=no, Djibouti, so, Jabuuti officially the Republic of Djibouti, is a country in the Horn of Africa, bordered by Somalia to the south, Ethiopia to the southwest, Eritrea in the north, and the Red ...

. In 1990, the Commercial and Savings Bank of Somalia discontinued operations. The Central Bank of Somalia also ceased to function at an undetermined date. The Bank of Somaliland was established in 1994, three years after the independence of Somaliland. It has branches in most cities and towns in the country, with a recent one being built in

Oodweyne , nickname = , settlement_type = Town , motto = , image_skyline = Oodweyne.jpg , imagesize = , image_caption = , image_flag = , flag_size ...

Objectives

In line with Article 3 of the Constitutive Law of Somaliland Bank, the bank aims to: *maintain

price A price is the (usually not negative) quantity of payment or compensation given by one party to another in return for goods or services. In some situations, the price of production has a different name. If the product is a "good" in the ...

and exchange rate stability *promote credit and trade condition which support balanced economic growth *support the economic and financial policies of the

government A government is the system or group of people governing an organized community, generally a state. In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is ...

where possible

Financial Organizations

The Bank of Somaliland isn't recognised by any country which is a factor on why its not apart of many financial organizations or any at all. In 2022 the Bank of Somaliland "joined forces" with the Accounting and Auditing Organization for Islamic Financial Institutions or AAOIFI marking a turning point for Somaliland and its future.

Currency and Exchange Rate

The central bank provides exchange services for various currencies at the official government rate, but most people prefer the unofficial rates used by

hawala Hawala or hewala ( ar, حِوالة , meaning ''transfer'' or sometimes ''trust''), also known as in Persian, and or in Somali, is a popular and informal value transfer system based on the performance and honour of a huge network of money ...

agents and

money changer A money changer is a person or organization whose business is the exchange of coins or currency of one country for that of another. This trade was a predecessor of modern banking. The advent of paper money in the mid-17th century and the develop ...

s on the streets of main cities. *In November 2000, the official exchange rate of Baanka Somaliland was Sl.Sh.4,550/- for 1

US dollar The United States dollar ( symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the officia ...

. Unofficial exchange rates at the time fluctuated between Sl.Sh.4,000/- and Sl.Sh.5,000/- per dollar. In December 2008, the official rate had fallen to Sl.Sh.7,500/- per US dollar. *In December 2015, the generally recognized exchange rate was Sl.Sh.6,000/- per US dollar, and by July 2019, the generally recognized exchange rate had dropped to Sl.Sh.8,500/- per US dollar. *In December 2022, the official exchange rate of Baanka Somaliland was Sl.Sh.8530/- for 1

. The Somaliland exchange rate in 2019 was Sl.Sh.8,500/- per US dollar which is a 0.35% increase of inflation, the Somaliland Shilling remains stable around the 8,000 mark and will most likely decrease in inflation in the coming years. Current

pegged exchange rate A fixed exchange rate, often called a pegged exchange rate, is a type of exchange rate regime in which a currency's value is fixed or pegged by a monetary authority against the value of another currency, a basket of other currencies, or another ...

U.S. dollar The United States dollar ( symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the officia ...

= ~ Sl.Sh.580/12.

References

External links