The Ethiopian Embassy in the US confirmed on Friday that ongoing talks between Ethiopia and financial institutions focused on Birr exchange rate distortions along with other points.
A senior Ethiopian delegation, led by Finance Minister Ahmed Shide, is in talks with International Monetary Fund (IMF) and World Bank (WB) officials these days. Mamo Mihretu, the Ethiopian National Bank Governor, is also part of the delegation. The delegations has held high level meetings in the US including a meeting with IMF managing director Kristalina Georgieva.
Ethiopia has been in talks with the IMF and World Bank for almost a year, hoping to get a bailout package for its troubled economy. Reportedly, Ethiopia is hoping to get a loan of around $3 billion. One of key decisions to be made by the Ethiopian government is devaluation of its currency birr.
The birr is trading around 117 per dollar in black market while its official exchange rate is around 57 per dollar. Ethiopian Embassy in the US, through a social media post, confirmed on Friday that the Ethiopian delegation and international financial institutions were discussing liberalization of Ethiopian economy, birr exchange rate distortions and other issues.
IMF and World Bank are urging Ethiopia to make its official birr exchange rate realistic. It seems to be one of the pre conditions to be met by Ethiopia before approval of any bailout package by IMF. While birr devaluation will surely increase inflation, Ethiopian government will have to make a decision in this regard in coming days.
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In my opinion my government need to open private exchange which they will work little margin rate difference to bank it can solve the current problem.No need to increase birr.
Ethiopian does not import major food items from abroad like our African peers country due to having well developed culture to produce and proocess our food. If we have shortage we need only to work hard on agriculture sector. These days we also manage better production which even enables us to export. Hence the talk of devaluation is not subject to issue of economy it rathers relates to political issues. So we should not devalue as we have to work hard to minimize the existing inflation through hard work and looking other alternatives.
But fertilizer is one of Ethiopias major import ( $1.3 b) making production impossible without it.
It’s better to control the black market exchange rate instead of devaluing the currency
Whether believed or not,such move considered as fueling already skyrocketed inflation rate overwelmgly affecting lives of many Middle and low income categories community
Dear all, do you think the IMF and World Bank care for the lives of people in developing countries? They want us to exterminate us by their genocidal liberalization.
IMF surly well understands that the countries economy slowed and inflation skyrocketed due the it’s 3 years of on going war that is happening in the country, IMF also knows the potential of the country in a stable environment, they are pressuring devaluation to pave the road and make it easier for foreign investors to invest and own companies, it’s a neo colonialism strategy.
IMF and World Bank are the servitude for western crusaders club. There is nothing wrong to devaluate Eth/Ber to make export more attractive but to demand to devaluate 60% of Ethiopian currency is economic suicidal. Even thought their interest rates are highest – very hard to repay still this neocolonial Banks control one’s economic destinations.
Now, Ethiopia is a member of BRICS, she ought to soliciting among the new economic & financial powerhouse called BRICS.
IMF and World Bank are the servitude for western crusaders club. There is nothing wrong to devaluate Eth/Ber to make export more attractive but to demand to devaluate 60% of Ethiopian currency is economic suicidal. Even thought their interest rates are highest – very hard to repay still this neocolonial Banks control one’s economic destinations.
Now, Ethiopia is a member of BRICS, she ought to soliciting among the new economic & financial powerhouse called BRICS.