Monday, March 04, 2013
For the family of Ahmed Hassan, the fall of the US dollar
against the Somali shilling has rendered making ends meeting a struggle
of its own.
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.
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 Somali currency has been deteriorating since
the collapse of the central government in 1991 and most of the lower
denomination currency have lost value and gone out of use.
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.