The
Secretary of State for the Colonies of the United Kingdom was in charge of the operation of currency boards. The East African Board was responsible for minting coins, printing notes, fixing the denominations of coins and notes, and, crucially, exchanging
East African Shilings for pounds and vice versa at a rate of 20 shillings for one pound
sterling. It issued commissions for exchanges at no more than half a percent. Profits of EACB, i.e., revenue after deduction of all expenses and of any contributions it made to the constituent territories, were to be credited to the currency reserve fund; losses were to be debited to this fund. EACB was allowed to invest its funds in public sterling securities or in such other manner as approved by the Secretary of State. The extent of investments was left to the discretion of EACB, but it was obliged to hold, subject to any directions from the Secretary of State, a sufficient proportion of its reserves in a liquid form. The board mainly dealt with commercial banks operating in East Africa, though in theory it had the authority to deal with any person or entity. (There were specific transaction limits.)
Scope Originally, the East African Currency Board was set up to operate in the
Kenya Colony and Protectorate and the
Uganda Protectorate, upon its establishment in 1919.
Tanganyika was added the following year, after the British Empire established a
League of Nations mandate there.
Zanzibar was added in 1936. During
World War II, they added Eritrea, Somaliland and Ethiopia, with the latter leaving to switch to the
Ethiopian dollar at the end of the war at a rate of 1 birr per 2 shillings. In 1950, when the former
Italian Somaliland became a UN Trust Territory administered by Italy, it left the Shilling in favour of the
Somalo at par. A year later, the Shilling was made the official currency of British Somaliland and Aden, but the former left in 1961 for the
Somali shilling at par. Aden became part of the
Federation of South Arabia in 1963, replacing the currency two years later with the
Yemeni dinar at the rate 1 dinar = 20 shillings. ==See also==