For example, Egypt’s pound weakened after it moved to a more market-determined forex regime under the terms of an IMF programme. Its government has turned for help to the IMF, which requires debt relief commitments from a country’s creditors before it agrees to a loan programme.Īdopting a more flexible exchange rate is also often a stipulation of the IMF. In 2020, the IMF recommended moving to a market-determined exchange rate to deal with an overvalued currency and foreign exchange shortages.Īfrica’s second most populous country requested debt restructuring in early 2021, but progress was held up by a two-year civil war in its Tigray region.Įthiopia’s government and the Tigray People’s Liberation Front, a rebel force-turned-political party, agreed on November 2 to stop fighting. The war displaced more than two million people and hurt the economy. 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. 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.

1 dollar in birr black market