The Djibouti Franc (DJF) is the official currency of Djibouti, a small country located in the Horn of Africa, bordered by Eritrea, Ethiopia, and Somalia.
The Djibouti Franc was introduced in 1949, replacing the French Somaliland Franc, as Djibouti was a French colony until it gained independence in 1977.
The Central Bank of Djibouti (Banque Centrale de Djibouti) is responsible for issuing and managing the Djibouti Franc.
Exchange Rate System
The Djibouti Franc has a fixed exchange rate system, where its value is pegged to the US Dollar (USD) at a rate of 1 USD = 177.721 DJF.
This fixed exchange rate system provides stability for the Djibouti Franc against fluctuations in the foreign exchange market, although it also makes the currency susceptible to external shocks.
Subdivisions and Denominations
The Djibouti Franc is subdivided into 100 smaller units called centimes.
However, due to low value and inflation, centimes are no longer in circulation.
Coins are issued in denominations of 1, 2, 5, 10, 20, 50, 100, 250, and 500 Francs.
Banknotes are available in denominations of 1,000, 2,000, 5,000, and 10,000 Francs.
Economy and Challenges
Djibouti’s economy is relatively small, with limited natural resources and a small population.
The country’s strategic location near the entrance to the Red Sea and along major shipping routes has made it a critical transit point for goods and services.
Major economic sectors include logistics, transportation, and services related to the port facilities.
Djibouti faces various economic challenges, such as high unemployment, poverty, and dependence on foreign aid.
Additionally, the country is vulnerable to external shocks due to its reliance on imports for food and energy.
Summary
In summary, the Djibouti Franc is the official currency of Djibouti and is managed by the Central Bank of Djibouti.
The currency has a fixed exchange rate system, pegged to the US Dollar, and is subdivided into centimes, although these are not in circulation. The Djibouti Franc is issued in various banknote and coin denominations.
Djibouti’s economy is relatively small and heavily reliant on its strategic location, and the country faces ongoing challenges related to unemployment, poverty, and dependence on foreign aid.