Best Bitcoin Exchange for Eritrea

Eritrea is an African country in the Horn of Africa with a developing economy largely dependent on the services industry. Eritrea gained independence from Ethiopia after a civil war in 1991. The Eritrean Nakfa is the official legal tender in the country. The Eritrean Nakfa is the only recognized legal tender for all transactions. The government banned the use of foreign exchange in local transactions in 2005 to increase the country’s currency reserves. The Bank of Eritrea issues the currency and operates independently of the Ministry of Finance. The Eritrean Nakfa replaced the Ethiopian Birr, which had served as the official currency since Ethiopia gained control over Eritrea. Also formerly used as a currency, the Eritrean Tallero circulated during the late 19th century. The use of the Tallero ceased at the end of the 20th century.

The Eritrean Nakfa

Eritrea introduced Eritrean Nakfa as the official legal tender in November 1997. The Eritrean Nakfa has the abbreviation Nfk with the ISO code ERN. Each Nakfa is divided into 100 cents. The Eritrean Nakfa has a fixed exchange rate with the US dollar of 15 Nfk for each dollar. The fixed interest rate was introduced in 2005. The Eritrean currency occurs in the form of coins and banknotes of various denominations. Coins are in denominations as low as 5, 10, 25 and 50 cents and the 1 Nakfa coin. Banknotes are in denominations of 1, 5, 10, 20, 50 and 100 Nakfas. Eritrean Nakfa was issued in five series, the first in 1997 and the last in 2015. The 2015 series has devalued all previous issues of banknotes. Clarence Holbert, an African American, designed the 2015 banknote series, which was produced by Giesecke and Devrient Printers, both based in Germany.

Stability of the Nakfa

Despite strong exchange rates against the US dollar, the Eritrean Nakfa remains a weak and unstable currency with an inflation rate of 18%. The currency is particularly weakened by the black market trade, where the dollar exchanges for more Nakfas as well as human trafficking and counterfeiting. The Eritrean government has taken several measures to counter the increase in counterfeit money and reduce its illegal accumulation abroad by issuing new banknotes. The initiative took place between November and December 2015 and the existing banknotes were devalued until January 2016. Currently, drought is the main factor behind high inflation rates, as it has led to food shortages and high grain prices.

Symbolism

The Eritrean Nakfa is not only the national legal tender, but also symbolizes the Eritrean independence struggle of Ethiopia. It is named after the city of Nakfa, an important region in the Eritrean War of Independence. The city later served as a base for Eritrean liberators and weakened the Ethiopian armed forces. Naming of the national currency after the city has honored Nakfa.

The Central Bank of Eritrea

The Bank of Eritrea, based in Asmara, is the country’s central bank. The Bank is state-owned and independent of the Ministry of Finance. In addition to the national currency, the Bank of Eritrea also deals with foreign investments, imports, purchases of industrial and agricultural equipment and the formulation and implementation of monetary policies.

Eritrea named its banknotes after a town

If a country would name its currency after the capital, this could probably still be understood. After all, it is often the cultural and economic centre of the state. This would look different, however, if the banknotes had the name of a provincial nest, if in Germany, for example, the “Recklinghausen” would have applied instead of the “Deutsche Mark”. But this is roughly how you have to imagine what happened in Eritrea.

The currency there is called Nakfa, and this is not a sophisticated metropolis, but rather a small town in the middle of the highlands of the state, 180 kilometres away from the capital Asmara. The honour of being chosen as the name giver for the national currency was given to the village, because it was always in the hands of the rebels, the “Eritrean People’s Liberation Front”, during the long war of independence against the Ethiopian government. Here they therefore had their headquarters, from where they fought against the government in Addis Ababa.

In 1993, after 30 years of war, Eritrea finally became independent. Initially, however, the country retained the currency of its former adversary, the Ethiopian Birr, for several years. Only in 1997 was the Nakfa introduced. For simplicity’s sake, the conversion rate was 1 to 1. Today, however, the currency is pegged to the US dollar at a fixed rate of 1 to 15.

The language on the currency is English, although the population mostly speaks other languages, especially Tigrinya. In addition, there are eight other languages that are formally considered national languages. English serves as the lingua franca for the banknotes in order not to give preference to anyone. English is also the official language in many parts of the country. Three people are depicted on the front of each note, depending on the value of the note, three men or three women alternately, some also children. The back shows scenes from everyday life (children at school, farmers at work). The right front and the left back show a camel – the country’s heraldic animal.