Today, Ethiopian currency birr saw a slight decline. Around 3% devaluation was recorded.
On Monday, Ethiopian Birr lost 30% of its value hours after the Ethiopian government announced macroeconomic reforms including liberalization of foreign exchange market. The floating exchange rate system introduced by the government reduced the value of Ethiopian currency.
Commercial Bank of Ethiopia on Monday updated foreign exchange rates. The CBE announced to sell US dollar for 74.73 birr. That was 30% decline from 58 (previous value of birr). Today the birr lost 3% more. CBE is now selling the US dollar for 77.12 birr.
Ethiopia this week got assurance from the IMF and World Bank about huge financing support. Both the lending institutions have announced to give around $20 billion dollar financial support to the Ethiopian government in the forms of grants, concessional loans etc over a period of next few years. The two financial institutions have been asking the Ethiopian government to adjust the birr official exchange rate according to market.
Birr was selling at 120 per dollar in black market before the announcement of these macroeconomic reforms. The government is hoping to put an end to black market by letting the market decide value of birr. It seems that birr could lose more value in coming weeks. Some experts are of the view that birr will settle around 90 per dollar.
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Nowadays. we have dirty paper, as currency. Prices in the market have gone up 100/100, people will die with hunger.