International Monetary Fund (IMF) is pushing for the Ethiopian currency to be devalued by 60% before the approval of a $3.5 billion loan. High level talks are in progress in the US between a senior Ethiopian delegation and the representatives from the IMF and World Bank.
“Negotiations are ongoing,” IMF Mission Chief for Ethiopia Alvaro Piris Chavarri told reporters today. “There are still differences.”
“I’m cautiously optimistic,” he said, declining to give details of the differences still to be resolved. “Discussions take the time they take.”
Reportedly, Ethiopia is hesitant to devalue Ethiopian currency at once. It wants to devalue birr gradually. It is offering to depreciate birr by around 15% at the start, gradually lowering it to 35%. While the IMF team wants 60% depreciation at the beginning.
The Ethiopian embassy in the US confirmed on Friday that the Ethiopian delegation and international financial institutions were discussing “liberalization” and “FX distortions”. Read more…
Ethiopian currency birr has lost its value considerably. While official exchange rate is around 57 birr per dollar, in black market it is around 117 birr per dollar.
Read More…
Amhara Bank Chairman Melaku Fenta in trouble amid inquiry by NBE
10000
Commercial of Bank ethiopia
NAWI ABA BIYAA ABA SIMEL
Ethiopia was never colonized. That’s what they say. Every country in the world was and is still colonized.
7500
Thank you
We would like to know if IMF has tangible evidence that was not provided by the government to determine black market value price as 117. How many dollars exchanged through this arrangement. Unlawful exchange market has no significant importance to devalue by 60 percent. What must be acceptable is what have legal exchange rate. We suggest the fed not to consider their notions. The fed as well as the user of birr currency notes know very well what had happened after the first floating and devaluation. We exhausted our capital . Most lost so much and work below their capacity. Monetary policy and fiscal policies simultaneously must be in place for the birr to appreciate but not the other way around. The previous government took 28 years to devalue the birr from 2.07 to 28 birr but perhaps the pressure had forced the fed to consider the suggestion and went on to devalue bt 100 percent within 3 years. Let us work and have realistic monetary policy to determine the value. Birr is not in the position to be on floating with USD. 3 billion USD could be mobilized ie by giving incentives to diaspora community to channel their transfer through lawful arrangement. We have no incentives package for disapora community to work with the fed. Ethiopia’ export items are limited. Liberization by the fed must be applaud. Incentives package as we have for exporters must be given to diaspora ie import utilization and bank exchange rate will treat the shortcomings. Let us postponed their suggestion. The burden will be on the fed shoulders.
I AM HAPPE
It is nkot advisabe to devalue. The black market for exchange 117 for a dollar is based on the cash out of banks. There are so much cash out of bank which their sources are not know and hence they cannot deposit in bank. Consequently they reserve it in hard currency at any rate they get. The rate indicated by IMF is not enough to tell status of the economy and exchange rate. We are relatively doing good in economy and yet we strive to get loan. This is abnormal.
Really the Ethiopia 🇪🇹 economy destruction is facing
The government shouldn’t accept the demand of devaluing birr if the government want to avoid an enormous challenge while the economy is doing pretty well.
This is how to keep a country poor and dependent on IMF. Looks like they are still playing the same old fame
Devaluation of birr at this time is not warranted. IMF has the tendency to always rush to require devaluation as the precondition for loan approval. That is not the panacea they think. I don’t think there is any nation that benefited from devaluation significantly. Egypt tried. Because of the huge inflow of dollar from the USA, they survived. Argentina tried, but still suffering dire consequences of devaluation.
The expected benefit of devaluation is the impact it would have on a nation’s exports. Ethiopia is not going suddenly double its exports. Yes, exports should be encouraged by all means. There is capacity issue to be considered. Devaluation will gave a devastating impact on the poor who are already suffering as the result of high inflation. The moment devaluation takes place, individuals would use the opportunity to raise prices on onions, potatoes, name it, even if there is no direct link between those and foreign currency. Of course, fuel is going to be affected. That has a domino effect on everything.
Why does IMF prescribe the expected devaluation rate as if they know Ethiopia more than the Ethiopians? Politics? Donation? To show who has power? Is it because ለማኝ አይመርጥም?? Sad!
Please DO NOT use the black market as as benchmark! What is going on in that market is simply demand-supply issue. There are individuals who have amassed wealth by different means. They have birr, so much of it, even after the government changed the currency! They are dying to get hard currency at any rate. If there was supply of hard currency legally without having to beg banks, if there are official exchange bureaus like in Kenya and Zambia, the black market would disappear! Many shops in Ethiopia stock up the products bought using the black market. Because hard currency is not officially available, corrupt practices are inevitable. I remember how long I waited in the queue to get $50 from the bank. Even that after being insulted! Yet people with connections get what they want when they want!! There is insatiable need for forex from multiple sources. Let’s liberalize the forex market closing loopholes for back door dealings. There should be competition from multiple dealers so as to reduce uncertainty.
Well said👍
I wonder why the IMF demands currency devaluation before giving a loan.Can anymore explain the good devaluation does to a country economy.In Nigeria here currency has been devalued all we can see is disaster,cost of living tripled,the years budget in government has given assistance to citizens that can not be quantified yet it’s like a drop in the ocean.The citizens are very angry. Africa must learn.Why is china not devaluing it’s currency being that it exports higher than any other country.
BAR GOOOD I LOVE RAIL YEMEN TOOO. ALLAH LOVE YEMEN ETHIOPIA TOOO COUNTRY SHOULD WORK TOGATHET WITH EGYPT Politaclly Throught UNA TO PUT ISRAEIL POWER DOWEN .
Devaluate or not, black market always sell hard currencies by far expensive than the real market values. You cannot correct market problems by devaluing the currency.
The Ethiopian government should stand against this politically motivated manuvouers.
Why not seeking New Development Bank to help, instead of IMF? After all Ethiopia is now a BRICS plus member.
Z country is under civil war,this also another war!
This is how western controls poor countries instead of the loans bringing economic relief it becomes the economic burden, these loans are not intended to make anything better in third world countries economic prosperity thats why they come with stupid conditions to sanction the indebted countries economy even further.
መንግሥት የዲያስፖራውን ማህበረሰብ ተጠቃሚ የሚያደርግ ፖሊሲ ቢያወጣ ለምሳሌ መሬት በነፃ ቢሰጥ፣ሁሉም ዲያስፖራ ሃገሩ ላይ ቤት መስራት ይፈልጋል ስለዚህ ለዚህ ቤት መስሪያ የሚውል ደግሞ ዶላር በባንክ በኩል እንዲያስገባ ቢደረግ በተጨማሪ ደግሞ መኪና ከቀረጥ ነፃ እንዲያስገባ ቢፈቀድ ይሄን 3.5 billion dollars በቀላሉ መንግሥት ከዲያስፖራው መሰብሰብ ይችላል ።
ይሄንን ደግሞ በታማኝነት፣በግልፀኝነት፣በተጠያቂነት ቢደረግ መንግስት የዶላር ፍላጎቱን ማስተካከል ይችላል ።
On Point!
መንግሥት የዲያስፖራውን ማህበረሰብ ተጠቃሚ የሚያደርግ ፖሊሲ ቢያወጣ ለምሳሌ መሬት በነፃ ቢሰጥ፣ሁሉም ዲያስፖራ ሃገሩ ላይ ቤት መስራት ይፈልጋል ስለዚህ ለዚህ ቤት መስሪያ የሚውል ደግሞ ዶላር በባንክ በኩል እንዲያስገባ ቢደረግ በተጨማሪ ደግሞ መኪና ከቀረጥ ነፃ እንዲያስገባ ቢፈቀድ ይሄን 3.5 billion dollars በቀላሉ መንግሥት ከዲያስፖራው መሰብሰብ ይችላል ።
ይሄንን ደግሞ በታማኝነት፣በግልፀኝነት፣በተጠያቂነት ቢደረግ መንግስት የዶላር ፍላጎቱን ማስተካከል ይችላል ።
ኢትዮጵያ እንደ “BRICS”ና አንዳንድ ሀብታም አባላቱን የመሳሰሉ የብድር አማራጮች ያሏት ይመስለኛል፤ የዓለም አቀፍ የገንዘብ ድርጅትና (“IMF) ና የዓለም ባንክ “WB” ከግማሽ ምዕተ ዓለም በሌይ በሆነው ከቢሩቶን ዊድ (Brtoon Woods) አሳሪና የአገራትን ኢኮኖሚና ፖሐቲካ መቀመቅ ከሚያስገባ ፖሊሲያቸው ፈቀቅ ማለት ተነስኗቸው ይታያሉ፣ ተበዳሪዎች ደግሞ እንደነዚህ ዓይነት አማራጮችን የሚጠቀሙበት ሕጋዊና የግኑኝነት መስመሮችን ከግምት ብያስገቡስ? እላለሁ።
Of Course, what else do you expect from them, except asking us to commit suicide. Do fell for it!