2026 data show Somaliland’s shilling with 9.4% inflation and relative exchange-rate stability, outperforming Egypt’s pound and Turkey’s volatile lira
HARGEISA — In a year marked by global inflation shocks and currency recalibrations, an unlikely outlier has emerged in the Horn of Africa.
Based on 2026 data, the Somaliland shilling appears comparatively stable against major currencies, with annual inflation at 9.4 percent, according to figures released by the Government of Somaliland. The exchange rate has hovered between 10,000 and 10,800 Somaliland shillings per U.S. dollar, reflecting modest fluctuations rather than the steep devaluations seen elsewhere.
By contrast, the Egypt’s pound is reporting 11.9 percent inflation this year, with the exchange rate steadying at around 47 Egyptian pounds to the dollar after years of sharp devaluations.
Meanwhile, the Turkey’s lira has continued its dramatic slide against the euro, underscoring the fragility of some emerging-market currencies.
A Quietly Managed Currency
Currency stability is rarely associated with unrecognized states. Yet analysts say Somaliland’s case defies conventional assumptions.
“The shilling has been remarkably consistent since 2019,” said one regional economist based in Nairobi, speaking on condition of anonymity because he advises financial institutions operating in the Horn of Africa. “You don’t see the kind of runaway depreciation that has characterized other frontier markets.”
From 2019 to 2026, the Somaliland shilling’s performance against the euro has shown relative steadiness:
Somaliland Shilling to Euro (2019–2026)
- 2019: 1 EUR ≈ 9,685 Slsh
- 2020: 1 EUR ≈ 9,958 Slsh
- 2021: 1 EUR ≈ 9,859 Slsh
- 2022: 1 EUR ≈ 8,655 Slsh
- 2023: 1 EUR ≈ 9,197 Slsh
- 2024: 1 EUR ≈ 9,221 Slsh
- 2025: 1 EUR ≈ 9,850 Slsh
- 2026: 1 EUR ≈ 10,000 Slsh
The fluctuations, while noticeable, remain within a relatively narrow band over seven years — particularly when compared with currencies undergoing structural crises.
A senior financial official in Hargeisa, who requested anonymity because he was not authorized to speak publicly, attributed the stability to “tight liquidity management, limited monetary expansion and consistent intervention in currency markets.”
Egypt’s Pound: Stabilized but Scarred
In Cairo, policymakers have spent years wrestling with external debt pressures and currency liberalization reforms. The Egyptian pound’s exchange rate now stands near 47 EGP per dollar, following successive devaluations that erased more than half its value in recent years.
“Egypt’s pound is steady today, but it’s steady at a much weaker baseline,” said a Gulf-based currency strategist, also speaking anonymously due to client sensitivities. “The inflation rate remains higher than Somaliland’s, even though Egypt has far greater institutional backing.”
With inflation at 11.9 percent in 2026, Egypt’s monetary authorities are signaling a return to predictability — but the scars of previous volatility remain embedded in household purchasing power.
Egyptian pounds to Euro (2019–2026)
- 2019: 1 EUR = 17.0 EGP
- 2020: 1 EUR = 17.5 EGP
- 2021: 1 EUR = 18.9 EGP
- 2022: 1 EUR = 20.7 EGP
- 2023: 1 EUR = 30.9 EGP
- 2024: 1 EUR = 42.0 EGP
- 2025: 1 EUR = 46.3 EGP
- 2026: 1 EUR = 47.0 EGP
Turkey’s Lira: A Study in Volatility
Few currencies illustrate prolonged depreciation more starkly than the Turkish lira.
Between 2019 and 2026, the lira’s exchange rate against the euro shifted dramatically:
Turkish Lira to Euro (2019–2026)
- 2019: 1 EUR = 6.06 TRY
- 2020: 1 EUR = 6.67 TRY
- 2021: 1 EUR = 9.03 TRY
- 2022: 1 EUR = 15.15 TRY
- 2023: 1 EUR = 20.02 TRY
- 2024: 1 EUR = 32.61 TRY
- 2025: 1 EUR = 36.62 TRY
- 2026: 1 EUR = 51.60 TRY
The lira’s trajectory reflects years of unorthodox monetary policy, political intervention in central banking and persistent inflationary pressures.
While Turkey’s economy remains far larger and more diversified than Somaliland’s, currency depreciation has reshaped domestic savings and corporate balance sheets.
“The contrast is striking,” said a European emerging-markets analyst. “Somaliland lacks international recognition and access to global capital markets, yet its currency path looks calmer than that of some G20 economies.”
The Limits of Stability
Economists caution, however, against oversimplifying the comparison.
Somaliland’s economy is heavily dollarized, with remittances forming a critical backbone. Limited financial integration can dampen speculative flows — a factor that sometimes insulates smaller economies from global shocks. But it also constrains growth and investment opportunities.
“Stability in a thin market is not the same as resilience in a deep one,” the Nairobi-based economist warned. “Somaliland’s challenge will be maintaining that equilibrium as it seeks broader financial integration.”
Still, in a region where currency crises have become almost routine, the Somaliland shilling’s record since 2019 stands out. Inflation at 9.4 percent is hardly trivial, but compared with the double-digit or triple-digit episodes experienced elsewhere in emerging markets, it reflects relative control.
As global markets navigate post-pandemic recalibrations, energy price swings and geopolitical tensions, currency performance remains a barometer of economic governance. In 2026, at least by the numbers, Somaliland’s small and largely isolated monetary system appears steadier than many would have predicted.
