Hiiraan Online
Friday February 10, 2017
A money-trading stall at Zoobe, Mogadisuh. HOL
Mogadishu (HOL) - The Somali market felt the reverberations of Mohamed Abdullahi Farmajo’s election after traders report the Somali shilling consolidating gains against the US dollar on Thursday.
Last week, the ShSom was trading at 22,300 against the $1USD, today traders we spoke to just before evening prayers said they were getting 15,000 for the dollar.
Some analysts attribute the gains made to the millions of dollars pumped into the local economy after Wednesday’s elections.
Independent observers have noted that close to $20 million was doled out in the run up the elections.
Somalia’s currency is largely dictated by business transactions in Somalia. The Somalia Central Bank has no significant influence on the national currency.
One of the traders who spoke to HOL said that the expectation that the
security forces will be paid is one of driving forces behind the recent
gains.
A senior economist that we spoke with agreed saying that money has been changing hands for weeks without effecting the value of the shilling. The fact the dollar made the gains immediately after the election is indicative of high expectations for his government.
"The euphoria of the election may have led traders to believe that the economy will improve and that good days are ahead" he wrote by e-mail "These are speculations because we don't have good data to do a proper analysis." He added that he expects the dollar to bounce back within a few days.