GNF - Guinean Franc

Overview of the Guinean Franc (GNF)

The history of the formation and development of the Guinean Franc (GNF)

The First Guinean Franc

In 1959, the Guinean Franc (GNF) was first introduced to replace the CFA Franc. Initially, coins were issued in denominations of 1, 5, 10, and 25 francs, and banknotes in denominations of 50, 100, 500, 1000, 5000, and 10,000 francs.

In 1963, a new series of banknotes was issued with improved designs and better security features. Among them, the 10,000 franc banknote was not issued. 

In 1971, the Guinea Franc was replaced by the Syli at a rate of 1 Syli to 10 Francs.

The Second Guinean Franc

In 1985, the Guinean Franc (GNF) was reintroduced at a rate equivalent to the Syli. The new coin denominations include: 1, 5, 10, 25, 50 Franc. The paper currency has denominations of 25, 50, 100, 500, 1000, and 5000 francs. In the lower left corner of each banknote, the date of issue is printed.

In 1998, the 25 and 50 franc banknotes were discontinued and replaced with coins. 

In 2006, banknotes with denominations of 500, 1000, and 5000 francs were issued with higher security features. 

In 2007, a new 10,000 franc banknote was issued.

In 2010, to commemorate the 50th anniversary of the introduction of the Guinean Franc (GNF), banknotes with denominations of 1,000, 5,000, and 10,000 francs were issued. The diamond-shaped logo of this event is printed on the front of each denomination.

In 2019, to commemorate the 59th anniversary of the Central Bank's launch, revised 10,000 franc banknotes and new 2,000 franc banknotes were issued.

Currently, the smallest denomination in circulation is the 500 franc note.

The Guinean Franc (GNF) Denominations

Currently, the denominations of the Guinea Franc being used include:

• Banknotes: Including denominations of 500, 1000, 2000, 5000, 10000, and 20000 franc.

• Coins: 1, 5, 10, 25, 50 franc.

In Guinea, paper money is more dominant and is used in daily transactions. Lower-value coins are used less frequently.

The people of Guinea mainly use banknotes with denominations of 1,000, 2,000, 5,000, 10,000, and 20,000 francs. The 500 franc note is currently the smallest denomination still in circulation, but its purchasing power has significantly decreased due to inflation.

The exchange rate of the Guinean Franc (GNF)

The exchange rate of the Guinean Franc against major world currencies is quite low. As of now, the exchange rate of the GNF against the USD is 1 USD = 8,500 GNF; Compared to the EUR, it is approximately 1 EUR = 9,000 GNF. 

This exchange rate fluctuates continuously due to the influence of various domestic and international economic factors. Especially the inflation situation and import-export activities in this country.

Factors affecting the value of the Guinean Franc (GNF)

The value of the Guinean Franc is quite low globally, reflecting the economic situation of Guinea. Here are some reasons why the Guinean Franc has a low value:

• High inflation: Prolonged inflation has eroded the purchasing power of the GNF and made it one of the lowest-valued currencies in the world.

• The economy depends on resources: Guinea relies heavily on the export of resources, especially bauxite, gold, and diamonds. When the prices of these commodities fluctuate, the economy is affected, directly impacting the value of the Guinean Franc. The lack of diversity in the economy is also a factor that contributes to the low value of the GNF.

• Trade deficit: Guinea often has to import many consumer goods, machinery, and equipment from abroad. While exports mainly rely on raw materials. The prolonged trade deficit has put pressure on the local currency, causing the GNF to weaken compared to stronger currencies like the USD and EUR.

• The unstable political and economic situation: Guinea has experienced numerous political upheavals and economic crises that have negatively impacted confidence in the local currency. Political instability and inconsistent economic policies have hindered long-term economic development, leading to the GNF remaining at a low level.

The Guinean Franc has a low value, so the Guinean government must strive to improve the economy through stabilization policies and infrastructure development to enhance the GNF in the future. Increasing the value of the Guinean Franc necessitates a multifaceted approach focusing on economic stability and growth. Key measures include implementing sound monetary policies to control inflation, enhancing fiscal discipline to reduce budget deficits, and promoting investment in critical sectors such as agriculture and mining. Additionally, fostering trade relationships and diversifying exports can strengthen foreign exchange reserves. Establishing a transparent regulatory environment will also attract foreign investment, further stabilizing the currency. Collectively, these strategies can contribute to a robust and resilient economy, ultimately enhancing the value of the Guinean Franc.