This article is posted by a website closely working with the Eritrean government. Compare and Contrast its contents with Mdre Bahri’s article ‘The Sudden Currency Change in Eritrea and its Effect!
By TesfaNews, November 5, 2015 |
The National Bank of Eritrea issued a legal notice No. 124/2015 to replace all denomination of the existing Nakfa currency notes with a new legal tender Nakfa currency notes. The unprecedented step that aimed at stimulating the economy first by regulating the circulation of the national currency is expected to effectively curb the rampant money laundering practices, illegal hoarding of large bills and circulation of counterfeit notes among others that are all contributing in strangulating the economy by skyrocketing the inflation and foreign currency exchange rates.
The legal notice outlines some strict procedures to follow during the exchange process of the old Nakfa currency notes as it puts in place a mechanism to squeeze out those who were amassing and hoarding large amount of the legal tender out of circulation among others.
The new regulation, however, provides only a two weeks window of opportunity for any individual or entity to deposit any amount of money they possess in their bank accounts, if they have any.
The stringent measure is expected to hit hard to those individuals and organisations who have been hoarding the Nakfa currency notes for quite some time; those who thrive from illegal border tradings and human trafficking; money launderers; and those who thrive from informal foreign currency exchange in the black market among other, as it effectively render their Nakfa empire to nothing than a worthless pile of paper.
The Bank said it will announce through media the period during which redemption shall commence and terminate.
The Nakfa was introduced in November 1997, replacing the Ethiopian Birr, six years after independence.