Eritrean nakfa

Eritrean nakfa
1 Nakfa Banknote
ISO 4217
Code ERN
Denominations
Subunit
 1/100 cent
Symbol Nkf (Latin script) ናቕፋ (Ge'ez script) ناكفا (Arabic script)
Banknotes 1, 5, 10, 20, 50, 100 nakfa
Coins 1, 5, 10, 25, 50 cents, 1 nakfa
Demographics
User(s)  Eritrea
Issuance
Central bank Bank of Eritrea
Valuation
Inflation 9%
 Source April 2017[1]
Pegged with U.S. dollar = 15 nakfa

The nakfa (ISO 4217 code: ERN) is the currency of Eritrea and was introduced on 8 November 1997 to replace the Ethiopian birr at par. The currency takes its name from the Eritrean town of Nakfa, site of the first major victory of the Eritrean War of Independence. The nakfa is divided into 100 cents.

The nakfa is pegged to the US dollar at a fixed rate of USD$1 = ERN15. Prior to that it was officially pegged at USD$1 = ERN13.50, however black market rates available on the streets typically offered a rate of 32 nakfas per dollar.[2]

Between 18 November and 31 December 2015, the Bank of Eritrea began replacement of all nakfa banknotes. The banknote replacement initiative was designed to combat counterfeiting, the informal economy but primarily Sudanese human traffickers who had accepted payments in nakfa banknotes in exchange for transporting would-be migrants primarily to Europe. A consequence of this was substantial amounts of the country's currency existed in vast hoardings outside Eritrea.

The plan to replace the country's currency was top secret and designed to prevent human traffickers bringing their funds back in time to exchange for the new banknotes.[3] On 1 January 2016 the old nakfa banknotes ceased being recognized as legal tender, rendering external stockpiles of currency worthless.[4]

The current series of banknotes is the artwork of an Afro-American banknote designer, Clarence Holbert,[5] and printed by German currency printer Giesecke & Devrient.[6]

Coins

Nakfa coins are made entirely of Nickel clad Steel. Each coin has a different reeded edge, instead of consistent reeding for all denominations. The 1 nakfa coin carries the denomination "100 cents". Coin denominations:

  • 1 cent
  • 5 cents
  • 10 cents
  • 25 cents
  • 50 cents
  • 1 nakfa (100 cents)

Banknotes

The nakfa banknotes were designed by Clarence Holbert of the United States Bureau of Engraving and Printing in 1994.

The back of the five Nakfa bank note with the actual Ficus sycomorus tree shown above it.

Banknotes come in denominations of:

  • 1 nakfa
  • 5 nakfa
  • 10 nakfa
  • 20 nakfa
  • 50 nakfa
  • 100 nakfa

There have been five series of banknotes since the currency's launch. The first issue for all denominations was dated 24.5.1997; the second issue consists of only the 50- and 100-nakfa notes and is dated 24.5.2004; the third issues also consists of only the 50- and 100-nakfa notes and was dated 24.5.2011, and the fourth issues consisted of only the 10- and 20-nakfa notes and was dated 24.5.2012. (May 24 is Eritrea's Independence Day).[7] The current fifth banknote series which rendered all previous currency valueless is dated 24.5.2015.

Exchange rate

Current ERN exchange rates
From Google Finance: AUD CAD CHF EUR GBP HKD JPY USD
From Yahoo! Finance: AUD CAD CHF EUR GBP HKD JPY USD
From XE: AUD CAD CHF EUR GBP HKD JPY USD
From OANDA: AUD CAD CHF EUR GBP HKD JPY USD
From fxtop.com: AUD CAD CHF EUR GBP HKD JPY USD

Eritrea's government has resisted calls to float the nation's currency, preferring the stability of a fixed exchange rate. However periodic devaluations have been made. ERN is a very weak currency. The de facto exchange rate of the currency is around 100 ERN for 1 USD.The currency does not have a good demand outside Eritrea. The black markets that exist in Asmara and a few other towns show the diminishing values of ERN.

See also

References

  1. ↑ Inflation rate, average consumer prices, IMF, April 2017, retrieved 9 October 2017
  2. ↑ A Broke Nation (PDF) (Oct), Université Cheikh Anta Diop de Dakar, 2004, retrieved 32 October 2016 Check date values in: |accessdate= (help)
  3. ↑ Eritrea won’t shorten national service despite migration fears (26 Feb), Sallina News, 2016, retrieved 22 October 2016
  4. ↑ Meet the New Eritrea Nakfa Bank Notes (29 Nov), Tesfa News, 2015, retrieved 22 October 2016
  5. ↑ Designing Eritrea’s Money was ‘Dream Come True’ (26 Jan), Tesfa News, 2015, retrieved 22 October 2016
  6. ↑ Currency and exchange facilities, Eritrea Be, 2015, retrieved 22 October 2016
  7. ↑ Linzmayer, Owen (2012). "Eritrea". The Banknote Book. San Francisco, CA: www.BanknoteNews.com.
Preceded by:
Ethiopian birr
Reason: currency independence
Ratio: at par		 Currency of Eritrea
1997 –		 Succeeded by:
Current
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