Mekelle፡ 30 July 2024 (Tigray Herald)
Ethiopian Government Adopts Market-Based Currency Exchange
The Ethiopian Government adopted a market-based currency exchange regime starting Monday. Under the new policy, commercial banks can buy and sell foreign currencies from/to their clients and among themselves at freely negotiated rates. Banks will no longer be required to transfer foreign currencies to the central bank, and private foreign currency exchange offices can operate freely. The recent ban on several imports, including fuel vehicles, has also been lifted. The US Embassy applauded the policy shift as a necessary step to address macroeconomic imbalances.
Ethiopia Secures $10.7 Billion for Economic Reforms
Ethiopia secured $10.7 billion from the International Monetary Fund (IMF), the World Bank, and other creditors to fund economic reforms and address the effects of the new floating foreign currency exchange regime, the central bank announced on Monday. Mamo Mihretu, the Governor of the central bank, stated that this amount did not include future financial support from the International Finance Corporation (IFC) and other multilateral institutions. The IMF confirmed it had allocated $3.4 billion over four years.
Ethiopian Birr Devalues by 30%
Following the introduction of a floating foreign currency exchange regime by Ethiopia’s central bank, the value of the birr dropped by 30% to 74.73 per US dollar on Monday. Last Friday, the Commercial Bank of Ethiopia traded 57.48 birr to one dollar. The birr also fell to 91.87 birr against the Pound Sterling from 70.67, and to 81.03 birr against the Euro from 62.33.
