A) Introduction

The two main economic variables that have a major impact on the livelihood of the ordinary citizens in the Republic of Somaliland are the fluctuations of the local currency (SLSH), i.e. Exchange Rate and the prices of goods and services (Inflation rate). During the year ended December 31, 2018, the annual headline inflation rate declined to 8%, from 18.9% on January at the beginning of the year. On the other hand, data collected from the foreign exchange markets in the country indicates steady appreciation of the national currency after a year of high Volatility. On December 2018, USD1 (one dollar) was bought for SLSH. 9,840, while in January, 2018, 1 USD was exchanged 10,500 dollars (1USD). This indicates that the inflation and exchange rates were stable in last year 2018.

B) Details of the inflation rate forthe year ended December 2018

According to the Consumer Price Index data provided by the statistics department of the Ministry of Planning and National Development of Somaliland, the Annual headline inflation rate has declined to 8% in December, 2018 compared to the same month one year ago (December 2017). The data of the inflation rate for the year of 2018 shows a significant decline from a two digit to single digit rate. The annual headline inflation rate hit its highest peak of 18.9% on January 2018, and declined to 8% (eight percent) by the end of December of the year 2018. See the following graph below showing the declining inflation rates for the months of January to December, 2018.

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