The ATM is located at the high-end Jazeera Palace Hotel in the capital city. It will allow people to withdraw money in US dollars from their foreign accounts. The US dollar has been widely used in Somalia as the value of the Somali shilling has declined.
"Most of the customers were not aware there is an ATM in Somalia. Local residents, most of them don't have a debit credit or a credit card to use the ATM,” said Justus Mulinge Kisaulu, the hotel's general manager, a media report said.
The machine, installed in September, is only available for customers with a MasterCard, Visa or American Express card.
(WATCH VIDEO: Banking in Somalia)
While there is currently no option for customers to withdraw money in other currencies Moallim Abukar, marketing manager of Salaam Somali Bank, says such an option will be available soon.
Dahabshiil, one of the biggest international money transfer businesses in Africa, are hot on the heels of Salaam Somali Bank. They also have plans to open an ATM in Mogadishu and Hargeisa.
(READ MORE: Somalia in need of short term remittance solutions)
Many people in Somalia receive money through money service businesses (MSBs) who serve as mediators between foreign banks that make the wire transfers and the beneficiaries of the money.
Earlier this year Reuters reported that the US would place tighter restrictions on money being sent to certain countries including Somalia, via MSBs as the US regulatory agencies feared money launders and militant groups were exploiting the service.
Somali expats expressed deep concern as use of MSB services are the only way they can effectively send money home.
It is said that the newly installed ATM is seen as a symbol of hope for the people of Somalia after decades of conflict.