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The Monetary Mechanism of Stateless Somalia

26 Pages Posted: 29 Apr 2012 Last revised: 26 Aug 2015

William J. Luther

Kenyon College; American Institute for Economic Research

Date Written: April 28, 2012


A peculiar monetary institution emerged during the period of interregnum in Somalia from January 1991 to August 2012. Without a functioning government to restrict the supply of notes in circulation, Somalis found it profitable to contract with foreign printers and import forgeries. The exchange value of the largest denomination Somali shillings note fell from US $0.30 in 1991 to US $0.03 in 2008. However, the purchasing power eventually stabilized at the cost of producing additional notes.

Keywords: institutions, monetary regime, monetary standard, Somalia, Somali shilling, purchasing power

JEL Classification: E42

Suggested Citation

Luther, William J., The Monetary Mechanism of Stateless Somalia (April 28, 2012). Available at SSRN: or

William Luther (Contact Author)

Kenyon College ( email )

Gambier, OH 43022
United States


American Institute for Economic Research

PO Box 1000
Great Barrington, MA 01230
United States

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