MOGADISHU, December 22, 2025 (Somalia Tribune) – Somalia is stepping up preparations to reintroduce its national currency, the Somali Shilling, as part of broader monetary reforms supported by the International Monetary Fund (IMF), according to a recently released IMF report.
The initiative, led by the Central Bank of Somalia, involves a currency exchange project that will replace existing notes with newly issued Somali Shilling banknotes. The reform is considered a national priority and a key step in strengthening monetary sovereignty and financial stability.
Somalia plans to adopt a currency board arrangement, under which the Somali Shilling will be fully backed by foreign exchange reserves. This framework is designed to boost confidence in the currency by limiting discretionary monetary policy and ensuring strict discipline in money issuance.
The IMF report notes that technical preparations are underway, including securing co-financing and reaching agreements with all Federal Member States. Draft amendments to the Central Bank of Somalia Act are being finalized to provide a strong legal foundation, enhancing the central bank’s mandate, governance, transparency, and accountability.
Once the law is adopted—expected by the end of 2025—the central bank will issue detailed regulations governing foreign exchange operations and the functioning of the currency board, including rules for counterparties and weekly public reporting of the board’s balance sheet.
The IMF emphasized that the credibility of the new Somali Shilling will depend on maintaining fiscal discipline, central bank independence, and ongoing economic reforms.
Somalia has operated under a largely dollarized system since the central government collapsed in 1991. Authorities view the planned currency reform as a milestone in rebuilding state institutions and restoring core economic functions.
