The Central Bank of Eritrea has issued a strict directive ordering all individuals and institutions to deposit all Nakfa cash holdings into commercial banks by the end of July. According to the mandate, citizens who do not currently possess bank accounts are required to open new ones immediately to facilitate their deposits.
The central bank explicitly stated that holding physical currency outside of formal banking institutions past the specified deadline will be deemed illegal. While the regulatory authority warned that strict legal actions will be taken against any non-compliant parties, it did not specify the exact penalties or fines that violators would face.
This sweeping monetary measure is part of the government’s decades-long policy of maintaining tight centralized control over the national economy and liquidity circulation. The regulatory environment mirrors a policy introduced a decade ago during a comprehensive currency redemption, which capped individual bank withdrawals at a strict limit of 5,000 Nakfa per month.
Under these ongoing restrictions, citizens facing major irregular expenses—such as weddings or traditional ceremonies—must obtain official permit letters from local administrative authorities to withdraw amounts exceeding the standard limit. Economists observe that these rigid compliance structures have placed significant operational burdens on daily commerce and local business activities.
Ultimately, the new directive is designed to pull large volumes of informal cash back into the state-controlled financial system. Eritrea continues to operate one of the most strictly regulated banking sectors globally, where a lack of modern digital infrastructure means the vast majority of daily transactions are still settled using physical banknotes.