The Central Bank of Somalia (CBS) (Somali: Bankiga ee Dhexe ee Soomaaliya, Arabic: البنك المركزي في الصومال) is the monetary authority of Somalia. Among other duties, it is in charge of ensuring financial stability, maintaining the internal and external value of the local currency, and promoting credit and exchange conditions that facilitate the balanced growth of the national economy. Within the scope of its powers, it also contributes to the financial and economic policies of the State.
On 15 November 1920, the Banca d’Italia opened a branch at Mogadishu. This was the first bank of any sort in what is now Somalia. Then in 1938 Banco di Napoli established a branch in Mogadishu and later one in Kismayo. (Banco di Napoli replaced Cassa di Risparmio di Torino, which had opened an office in Mogadishu in 1932.)
In 1952 National Bank of India (NBI), which later merged with Grindlays Bank to form National and Grindlays Bank, established branches inBerbera and Hargeisa in British Somaliland. NBI was the first bank in British Somaliland and was the banker to the colonial government until British Somaliland joined Italian Somaliland to form the Somali Republic in 1960. After the unification, National and Grindlays opened a branch in Mogadishu.
On 1 July 1960, the newly independent Republic of Somalia established the Banca Nazionale Somala (National Bank of Somalia) to take over the activities of the Cassa per la Circulazione Monetaria della Somali and the Mogadishu branch of Banca d’Italia. The new bank combined central banking activities with commercial banking activities.
In 1968 the government merged the Credito Somalo (Somali Credit Bank), which the Italian administration had established in 1954, with the Banca Nazionale Somalo.
After the bloodless coup d’état of 1969 that saw Mohamed Siad Barre‘s ascension to power, the government in 1971 nationalized the four foreign banks – Banco di Roma, Banco di Napoli, National and Grindlays Bank and Banque de Port Said) – and combined them to form the Somali Commercial Bank. The government also established the Somali Savings and Credit Bank to take over the commercial branches of Banca Nazionale Somala, leaving the Banca Nazionale Somale with only central banking functions. The Somali Savings and Credit Bank had branches in Baidoa, Beledweyne, Berbera, Bosaso, Burco, Galkacyo, Qardho, Hargeisa and Kismayo, and for a while in Djibouti.
On 8 February 1975, the government renamed the Banca Nazionale Somala to the Central Bank of Somalia (Bankiga Dhexe ee Soomaaliya). It also merged the Somali Commercial Bank and Somali Savings and Credit Bank to form the Commercial and Savings Bank of Somalia, which was at the time the only bank in the country. In 1990 the Commercial and Savings Bank of Somalia discontinued operations. At some point the Central Bank of Somalia too ceased functioning.
In 2009 the recently-formed Transitional Federal Government re-opened the Central Bank of Somalia in Mogadishu as part of its campaign to restore national institutions. The Bank has an additional branch in Baidoa that is already operational with personnel in place.