By M.A. Egge
The Central Bank of Somaliland on Tuesday carried out an operation in the city of Hargeisa to peg currency in an effort to stabilize the local shilling.
The policy has been in place to fight inflation from time to time.
The bank has also cautioned unscrupulous business fraternity not to fleece consumers by unnecessarily hiking prices.
The local power and water suppliers have also been directed to bill their clients in local currency.
Given the latest jittery exchange rates that have threatened to destabilize the market, the Central Bank has swiftly moved to buy the shilling by injecting foreign hard currencies to stabilize the market economy.
By thus, the excess and surplus cash is temporarily withdrawn from the market to maintain confidence.
In recent weeks the markets have been jittery since inflation has been felt and the members of the public have been grumbling.
The pegging operation was led by the deputy governor of the Central Bank who was flanked by the bank’s Director General Mr. Mohamed Qasim Hussein.
The DG elaborated on the essence of the exercise.
He said, “We have carried out an operation in the exchange rates’ market in Hargeisa city, fighting against the recent inflation in the foreign exchange market. We have floated US dollars in the market and taken surplus Somaliland shillings cash out of it to stabilize it”.
He continued, “We inform the community that the exchange rate of the dollar to be pegged is 9350 shillings and 9450 shillings on buying and selling”.
He cautioned all money changers to stick to the stipulated rate.
He was categorical that, “The central bank has an obligation to maintain the stability of the currency, to raise the quality of the Somaliland shilling. All money changers are thus advised to go by the rate set by the bank. Anything to the contrary will thus be illegal”.
Likewise the DG warned the local power and water supply services to bill their clients in local currency.
So, too, has he cautioned local business fraternity not to hike their merchandise unnecessarily, to inflate the costs of commodities, and unscrupulously fleece the unsuspecting consumers in the country.
He warned that all those reported for the vice will be prosecuted.
Last week the bank had made a major operation in the frontier town of Tog-Wajaale to round-up about 70 illegal and unregistered money exchangers who were potentially disrupting the rates.