NBE Calls Urgent Meeting to Address Birr Crisis

Spread the love

The Governor of the National Bank of Ethiopia, NBE, Mamo Mehirtu, called an urgent meeting with leaders from commercial banks on July 29, 2024, regarding the recent economic reforms and birr devaluation. This indicates the importance and urgency of the changes being implemented.

This urgent meeting called by NBE will address the escalating economic crisis, primarily focused on the rapid devaluation of the birr.

Also on Monday, the Ethiopian government delegation and IMF team are due to meet to make an announcement about a bailout package. Ethiopia is expected to get around $10 billion from the financial institutions.

The new economic changes will introduce several important steps. First, the government will implement a market-based foreign exchange system to help set a fair value for the country’s currency. The official birr exchange rate currently stands at 58.6 birr against the dollar, while in the black market the birr is trading at around 115 birr per dollar.

The National Bank of Ethiopia has also issued new guidelines to enforce these reforms, which are part of a broader initiative known as the Home-Grown Economic Reform Program (HGERP). These guidelines will require banks to adapt to the new rules, especially regarding how they handle exchange rates.

Furthermore, the government is going to implement a partial increase in fuel prices as part of the new economic strategy and also consider depreciating the birr by 10-15%.

Ethiopia Announces Birr Devaluation Ahead of a Key IMF Meeting