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Somali Govt. Auctions Dollar to Curb Inflation
The transitional government of Somalia has started a new campaign in auctioning hundreds of thousands of US dollars in an exchange of Somali shillings, as part of its activities to fight the serious inflation which has devastated the business activities as well as the lives of the ordinary citizens in the Horn of African country.
Seven days ago, the central bank of Somalia announced the auction of 170,000 dollars for the highest bidders. In this first auction, the bank expected over 100 businesspersons to attend, but only 17 people turned up for the contest.
Mohamud Mohamed Ulusow, governor of the central bank, said on Thursday that the small number of participants clearly indicated that the Somali people have little confidence in the entire financial system.
However, he added that in the second round of the auction two days ago, 83 people attended to contest for 300,000-dollar auction.
"Now, I am sure, in the third round, the people will be even more as everyone now sees how the central bank is serious about its fight against the inflation," Ulusow said. "This will dramatically increase the supply of the foreign currency in the markets so as to stimulate the value of the shilling."
At present a dollar is exchanged against 18,200 shillings in Somalia.
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