The nakfa (
ISO 4217 code: ''ERN''; ''naḳfa'', or or نقفة ''nākfā'') is the
currency
A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins.
A more general ...
of
Eritrea and was introduced on 15 November 1998 to replace the
Ethiopian birr
The birr ( am, ብር) is the unit of currency in Ethiopia. It is subdivided into 100 ''santim''.
In 1931, Emperor Haile Selassie I formally requested that the international community use the name ''Ethiopia'' (as it had already been known inte ...
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 Eritrean War of Independence was a war for independence which Eritrean independence fighters waged against successive Ethiopian governments from 1 September 1961 to 24 May 1991.
Eritrea was an Italian colony from the 1880s until the ...
. The nakfa is divided into 100
cents.
The nakfa is pegged to the
US dollar
The United States dollar ( symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the officia ...
at a fixed rate of US$1 = ERN 15. At earlier times, it was officially pegged at US$1 = ERN 13.50. The currency is not fully convertible, so black market rates available on the streets typically offered a rate of 15 nakfas per dollar.
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
Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a subcontinent of Eurasia and it is located entirel ...
. A consequence of this was substantial amounts of the country's currency existed in vast hoards outside of
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.
On 1 January 2016 the old nakfa banknotes ceased being recognized as legal tender, rendering external stockpiles of currency worthless.
The current series of banknotes is the artwork of an Afro-American banknote designer, Clarence Holbert,
and printed by
German currency printer
Giesecke & Devrient
Giesecke+Devrient, also known as (G+D), is a German company headquartered in Munich that provides banknote and securities printing, smart cards, and cash handling systems.
History
Founded in 1852 by Hermann Giesecke and Alphonse Devrient, th ...
.
Coins
Nakfa coins are made entirely of
nickel
Nickel is a chemical element with symbol Ni and atomic number 28. It is a silvery-white lustrous metal with a slight golden tinge. Nickel is a hard and ductile transition metal. Pure nickel is chemically reactive but large pieces are slow ...
-clad
steel. Each
coin
A coin is a small, flat (usually depending on the country or value), round piece of metal or plastic used primarily as a medium of exchange or legal tender. They are standardized in weight, and produced in large quantities at a mint in order t ...
has a different reeded edge, instead of consistent
reeding
Reeding is a technique wherein a number of narrow ridges called "reeds" are carved or milled into a surface.
__NOTOC__ Numismatics
In numismatics, reeded edges are often referred to as "ridged" or "grooved" (American usage), or "milled" (Britis ...
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.
Banknotes
A banknote—also called a bill (North American English), paper money, or simply a note—is a type of negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand.
Banknotes were originally issued ...
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).
The current fifth banknote series which rendered all previous currency valueless is dated 24.5.2015.
Exchange rate
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 US$1. The currency does not have a good demand outside of Eritrea. The black markets that exist in Asmara and a few other towns show the diminishing values of ERN.
See also
*
Economy of Eritrea
References
External links
Regulations concerning the nakfa from Afrol news
{{DEFAULTSORT:Eritrean Nakfa
Fixed exchange rate
Currencies introduced in 1997