The nakfa (

ISO 4217 ISO 4217 is a standard published by the International Organization for Standardization (ISO) that defines alpha codes and numeric codes for the representation of currencies and provides information about the relationships between individ ...

code: ''ERN''; ''naḳfa'', or or نقفة ''nākfā'') is the

currency A currency 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 definition is that a currency is a ''system of money'' in common use within a specific envi ...

Eritrea Eritrea, officially the State of Eritrea, is a country in the Horn of Africa region of East Africa, with its capital and largest city being Asmara. It is bordered by Ethiopia in the Eritrea–Ethiopia border, south, Sudan in the west, and Dj ...

and was introduced on 15 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 Eritrean War of Independence was an War, armed conflict and insurgency aimed at achieving self-determination and independence for Eritrea from Ethiopian rule. Starting in 1961, Eritrean insurgents engaged in guerrilla warfare to liberate ...

. The nakfa is divided into 100 cents. The nakfa is pegged to the

US dollar The United States dollar (symbol: $; currency code: USD) is the official currency of the United States and several other countries. The Coinage Act of 1792 introduced the U.S. dollar at par with the Spanish silver dollar, divided it int ...

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 The Bank of Eritrea is the central bank of Eritrea. The bank is located in Asmara, the capital. The central bank is interested in encouraging foreign investment and in importing capital goods such as industrial machinery and agricultural equipmen ...

began replacement of all nakfa banknotes. The banknote replacement initiative was designed to combat

counterfeiting A counterfeit is a fake or unauthorized replica of a genuine product, such as money, documents, designer items, or other valuable goods. Counterfeiting generally involves creating an imitation of a genuine item that closely resembles the original ...

, the

informal economy An informal economy (informal sector or grey economy) is the part of any economy that is neither Taxation, taxed nor monitored by any form of government. Although the informal sector makes up a significant portion of the economies in developin ...

but primarily

Sudan Sudan, officially the Republic of the Sudan, is a country in Northeast Africa. It borders the Central African Republic to the southwest, Chad to the west, Libya to the northwest, Egypt to the north, the Red Sea to the east, Eritrea and Ethiopi ...

ese human traffickers who had accepted payments in nakfa banknotes in exchange for transporting would-be migrants primarily to

Europe Europe is a continent located entirely in the Northern Hemisphere and mostly in the Eastern Hemisphere. It is bordered by the Arctic Ocean to the north, the Atlantic Ocean to the west, the Mediterranean Sea to the south, and Asia to the east ...

. A consequence of this was substantial amounts of the country's currency existed in vast hoards outside of

. 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 German(s) may refer to: * Germany, the country of the Germans and German things **Germania (Roman era) * Germans, citizens of Germany, people of German ancestry, or native speakers of the German language ** For citizenship in Germany, see also Ge ...

currency printer

Giesecke & Devrient Giesecke+Devrient GmbH (G+D) is a German international security technology company operating in the fields of Computer security, digital security, financial platforms, and currency technology. Founded in 1852, the company evolved from a manufactu ...

Coins

Nakfa coins are made entirely of

nickel Nickel is a chemical element; it has 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 slo ...

-clad

steel Steel is an alloy of iron and carbon that demonstrates improved mechanical properties compared to the pure form of iron. Due to steel's high Young's modulus, elastic modulus, Yield (engineering), yield strength, Fracture, fracture strength a ...

. Each

coin A coin is a small object, usually round and flat, 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 to facilitate trade. They are most often issued by ...

has a different reeded edge, instead of consistent

reeding Reeding or milling is a technique wherein a number of narrow ridges called "reeds" are carved or milled into a surface with a Castaing machine. Numismatics In numismatics, reeded edges are often referred to as "ridged" or "grooved" (American ...

for all denominations. The 1 nakfa coin carries the denomination "100 cents". The common reverse shows fighters raising the Eritrean flag, the date "1991" and the legend "Liberty, Equality and Justice."

Banknotes

The nakfa banknotes were designed by Clarence Holbert of the

United States Bureau of Engraving and Printing The Bureau of Engraving and Printing (BEP) is a government agency within the United States Department of the Treasury that designs and produces a variety of security products for the United States government, most notable of which is Federal Res ...

in 1994. They depict ordinary people from each of Eritrea's nine principal ethnic groups (

Tigrinya Tigrinya may refer to: * Tigrinya language Tigrinya, sometimes romanized as Tigrigna, is an Ethio-Semitic languages, Ethio-Semitic language, which is a subgrouping within the Semitic languages, Semitic branch of the Afroasiatic languages. It i ...

, Tigre,

Rashaida The Rashaida (), also known as Bani Rasheed, are a Bedouin ethnic group inhabiting the coastal plain of the Red Sea stretching from the Sudanese city of Port Sudan to the Eritrean city of Massawa. They are the descendants of Arab tribes people f ...

Nara The National Archives and Records Administration (NARA) is an independent agency of the United States government within the executive branch, charged with the preservation and documentation of government and historical records. It is also task ...

, Afar, Saho, Bilen, Beja, Kunama), rather than any political or historical figures. There have been five series of banknotes since the currency's launch. The first issue for all denominations was dated 24 May 1997; the second issue consists of only the 50 and 100 nakfa notes and is dated 24 May 2004; the third issues also consists of only the 50 and 100 nakfa notes and was dated 24 May 2011, and the fourth issues consisted of only the 10 and 20 nakfa notes and was dated 24 May 2012. (24 May is Eritrea's Independence Day). The current fifth banknote series which rendered all previous currency valueless is dated 24 May 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. the official exchange rate was 15 ERN to one USD. 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.

References

External links

Regulations concerning the nakfa from Afrol news
{{DEFAULTSORT:Eritrean Nakfa Fixed exchange rate Currencies introduced in 1997 Currencies of Africa Circulating currencies

Coins

Banknotes

Exchange rate

See also

References

External links