Eritrean Nakfa Surpasses Ethiopian Birr in Value

The Eritrean Nakfa (ERN) has surpassed the Ethiopian Birr (ETB) in value after the Ethiopian government devalued the Birr currency by nearly 17% (Source: VOA). The pros and cons of this move have been debated by analysts. Some argue this will boost Ethiopia's exporting goods and make Ethiopia more competitive for foreign investments. Others argue this will lead to inflation and drive up the prices of imported goods such as fuel and other imported materials.

Statistics provided for 2010 fiscal season shows Ethiopia with a $7 billion dollar trading deficit(VOA). Ethiopia imported $8.7 billion in commodities, while exporting just 1.7 billion(VOA). This trading gap makes up 30% of Ethiopia's Gross Domestic Product (GDP) which totals to 23 billion dollars annually(VOA).

As of right now, one United States' dollar exchanged into the Eritrean Nakfa would fetch you around 15 Nakfas. In comparison, the recently devalued Ethiopia birr would get you 16 Ethiopian Birr. The only horn of African nation with a solid exchange rate is the Sudanese pound. One USD exchanged into the Sudanese pound would get you a little over two Sudanese pounds and some change. The reason for this is because the Sudanese economy is backed by petroleum oil; therefore, since they have a prized commodity, i.e, their oil, it strengthens their currency's value. War-torn Somalia has among the worst exchange rates. A single USD gets you 1,606 Somali shillings. The following chart is an up-to-date currency exchange rate in USD, EUR, and GBP. Both the EUR and GBP are worth more than the USD.

Horn Currencies	USD (United States Dollars)	EUR (European Union Euro)	GBP (Great Britian Pound)
Eritrea Nakfa    (ERN)	1 USD = 15 (ERN)	1 EUR = 20.2378 (ERN)	1 GBP = 23.7396 (ERN)
Ethiopia Birr     (ETB)	1  USD = 16.465  (ETB)	1 EUR = 22.2144 (ETB)	1 GBP = 26.0582  (ETB)
DjiboutiFranc   (DJF)	1 USD  = 177.72  (DJF)	1 EUR = 239.778  (DJF)	1 GBP = 281.2668  (DJF)
Sudan Pound   (SDG)	1 USD = 2.38  (SDG)	1 EUR = 3.2111(SDG)	1 GBP = 3.7667  (SDG)
Somali Shilling  (SOS)	1 USD = 1599.95  (SOS)	1 EUR = 2158.6365 (SOS)	1 GBP = 2532.1449 (SOS)

All numbers provided above comes from Bloomberg's currency converter.



. Sponsored Ads