Eyob Tekalign Tolina(PhD) January 19, 2023Įthiopia operates a managed exchange rate for the birr, allowing it to depreciate gradually against the dollar. A sensible macro reform is always our agenda but there should not be any concern about mere devaluation. There is widespread rumor that devaluation is in the making. A sensible macro reform is always our agenda but there should not be any concern about mere devaluation.” “There is widespread rumor that devaluation is in the making,” Eyob Tekalign, state minister in the Ministry of Finance, said on Twitter on Thursday. The birr currently trades at 53.42 to the United States dollar, according to Refinitiv Eikon data, but it is reportedly worth 96 to 97 on the black market, and the country has long experienced foreign exchange shortages. “The National Bank of Ethiopia (Central Bank), follows a managed floating exchange rate regime where the local currency Birr is pegged to the US Dollar,” a study dubbed “The effect of exchange rate on economic growth in Ethiopia” partly reads.Speculation that the birr currency would be devalued is “completely unfounded”, Ethiopia’s junior finance minister says as the country seeks an International Monetary Fund (IMF) loan after agreeing to a ceasefire in its two-year civil war. However, the Ethiopian exchange rate system has not officially been liberalised yet and the rate is still determined by NBE. In September 2019, National Bank of Ethiopia (NBE) Governor Yinager Dessie told Reuters that Ethiopia should slowly liberalise its exchange rate regime. The same report adds that authorities have underscored their continued commitment to closing the gap with the parallel rate to eventually move to a market-clearing exchange rate, but signalled a need to continue moving with caution. “Increasing the pace of depreciation would help reduce real overvaluation and act as a shock absorber during the crisis,” the report states. In May 2020, the International Monetary Fund (IMF) country report urged Ethiopia to accelerate the birr depreciation. The second and current Birr has been the official currency of Ethiopia since the nineteen forties. Although the first Birr dates back as far as the early nineties, the coins used in Ethiopia were Maria Theresa thalers and Menelik II talari. The Ethiopian Birr is the second most used currency in Africa after Nigeria’s Naira. The National Bank of Ethiopia and formerly the Bank of Abyssinia is the central bank.
It has been in service since the Nineteen-Thirties. The Ethiopian currency is called Ethiopian Birr. – Black market exchange is illegal in Ethiopia therefore its advisable to use legal channels to exchange foreign currency. Black market exchange rate is 68.00 – 82.00 birr depending on location. – Holiday season () Dollar official exchange rate 52.26 birr.
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