Hiiraan Online

His family, like many others, received a few hundred dollars from family members abroad with which they paid all the households needs, including food, schools fees and medical treatments.

But the fall in the rate of the dollar against the Somali shilling has impacted on their livelihood.

Plummeted

The exchange rate between the Somali shilling and the US dollar has plummeted almost half what it was a year and half ago.

But recent weeks have seen the biggest fall.

I don’t understand why the dollar is losing its value against the Somali shilling but what I know is that I am getting less money for the dollar I get from son aboard,” said Mr Hassan Yusuf, a father of eight, at the main forex section in Bakara Market, Mogadishu.

Traders at the main Bakara market say the trend is likely to continue and that the value of the Somali shilling is not only rising against the dollar but against major world currencies, including the Euro.

The US dollar is the second most used currency in Somalia after the local currency. Most local Somali companies and schools pay monthly salaries in US dollars and most of the big purchase like cars, houses and goods are bought in US dollars.

Mrs Hawa Idleh, a mother of five, says her family’s purchasing power has been halved in less than two years as the money they get cannot buy them all the necessary things they need.

Local foreign exchange traders say that the fall in the value of the US dollar is due to the huge supply of the green buck by returning Somalis from the diaspora and the various development projects being implemented in the capital. 

Meanwhile the Somali government has expressed concern at the negative impact the fall of the exchange rate is having on the livelihood of families.

The government named a committee, led by the Finance minister and the local business community, “to study the impact of the changes in the exchange rates.