By Asha Elmi - Reporter
MOGADISHU, 11 October 2026 Somali lawmaker Abdullahi Arab has questioned the economic and legal basis for a proposed exchange rate of 100 Somali shillings to one U.S. dollar as parliament debates amendments to the law governing the Central Bank of Somalia.
During the second reading of the bill, Arab challenged Article 34(2) of the draft legislation, asking why the rate had been set without a formal study being presented to lawmakers.
“What is the economic and legal basis for determining in Article 34(2) that 100 Somali shillings equal $1, when no formal study has been presented to the House?” Arab asked during the session.
He also questioned how the proposed arrangement would affect the Central Bank’s monetary-policy powers, saying lawmakers needed clarity on the legal and economic framework governing the currency.
The debate comes as Somalia prepares to reintroduce the Somali shilling after decades without the Central Bank issuing new banknotes. In a December 2024 assessment, the International Monetary Fund said the authorities intended to restore the shilling as legal tender, replacing old and mostly counterfeit notes already in circulation.
The IMF said the reform was intended to restore confidence in the national currency, improve financial inclusion for people with limited access to formal financial services and facilitate small-value transactions. It also said Somalia was preparing to adopt a currency-board arrangement designed to provide a stable and predictable framework for the currency while retaining a dual-currency system with the U.S. dollar.
Related articles
The proposed rate of 100 shillings to the dollar discussed in parliament does not confirm a current market exchange rate or establish that the new currency has been introduced.
Lawmakers also sought details on how the planned banknotes would be introduced, asking when they would be issued, what denominations and designs they would carry, and where they would be printed. Some MPs called for the Central Bank governor to appear before parliament to answer technical questions about the plans.
The discussion also highlighted the importance of cash for rural communities, small businesses and livestock traders, some of whom have limited access to digital payment services. The IMF has previously identified small-value transactions and access to financial services among the objectives of the planned currency reform.
The parliamentary committee reviewing the bill said it would consider recommendations raised during the debate. It said details on banknote samples, denominations, designs and printing arrangements would be presented to lawmakers at the appropriate stage.
The bill remains under parliamentary consideration. The debate has raised questions about the proposed exchange-rate provision and the practical steps needed to introduce new banknotes, alongside wider concerns about the Central Bank’s independence and monetary-policy powers.