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 individual cu ...

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 def ...

Eritrea Eritrea ( ; ti, ኤርትራ, Ertra, ; ar, إرتريا, ʾIritriyā), officially the State of Eritrea, is a country in the Horn of Africa region of Eastern Africa, with its capital and largest city at Asmara. It is bordered by Ethiopia ...

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 d ...

. 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 official ...

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 To counterfeit means to imitate something authentic, with the intent to steal, destroy, or replace the original, for use in illegal transactions, or otherwise to deceive individuals into believing that the fake is of equal or greater value tha ...

, the

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

but primarily

Sudan Sudan ( or ; ar, السودان, as-Sūdān, officially the Republic of the Sudan ( ar, جمهورية السودان, link=no, Jumhūriyyat as-Sūdān), is a country in Northeast Africa. It shares borders with the Central African Republic t ...

ese 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 Continent#Subcontinents, subcontinent of Eurasia ...

. 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 (of or related to) **Germania (historical use) * Germans, citizens of Germany, people of German ancestry, or native speakers of the German language ** For citizens of Germany, see also German nationality law **Ger ...

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, the ...

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 to ...

-clad

steel Steel is an alloy made up of iron with added carbon to improve its strength and fracture resistance compared to other forms of iron. Many other elements may be present or added. Stainless steels that are corrosion- and oxidation-resistant ty ...

. 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 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.

Banknotes A banknote—also called a bill (North American English), paper money, or simply a note—is a type of negotiable instrument, negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand. Banknotes w ...

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.

References

External links

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

Coins

Banknotes

Exchange rate

See also

References

External links