Forex trading is legal in Somalia, though it operates within a developing regulatory framework. The Central Bank of Somalia (CBS) serves as the main regulatory authority for the country's financial sector (1). While there are no laws or regulations specifically prohibiting forex trading, there is an absence of comprehensive regulatory oversight for online forex brokers (2).
Somalia operates as a predominantly U.S. dollar-based economy, with the primary transaction currency being U.S. dollars rather than Somali shillings (1). The Central Bank of Somalia has established foreign exchange controls and documentation requirements for financial transactions. The CBS Financial Markets Department is specifically mandated to implement foreign exchange policy, hold and manage Somalia's foreign exchange reserves, and manage exchange rates (2).
"The principal purpose of the Financial Market department is to implement the monetary policy of the Central Bank of Somalia through Open Market Operations, manage official foreign exchange reserves and exchange rates."
A financial control system is currently in place, requiring export documentation to comply with monetary policies and regulations, with any sum above $10,000 requiring proof of payment (1). While forex trading is completely legal in Somalia, the country's financial infrastructure requires extensive upgrades to match other African nations (2). Somali traders can participate in forex markets, but they should exercise caution due to the limited regulatory oversight of international brokers operating in the country.
Source:
https://www.trade.gov/country-commercial-guides/somalia-trade-financing
https://centralbank.gov.so/financial-market/
Last updated: 01-06-2025 Disclaimer: This article does not provide legal advice. If you need legal advice, please contact an attorney directly.
