June 20, 2024

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Ethiopian currency

WFP Warns Against Ethiopian Currency Birr Devaluation

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The World Food Program (WFP) warns that Ethiopian currency birr devaluation will have serious consequences. It warned this week that inflation will worsen in case of birr devaluation.

In a document, the organization said if Ethiopian currency is devalued, inflation will worsen and the price of fuel and fertilizer will increase.

Ethiopian government recently allowed foreign companies to participate in import, export, retail and wholesale trade. These sectors of economy were opened for foreigners in order to obtain loans from the International Monetary Fund and the World Bank.

Ethiopian government has been in talks with the International Monetary Fund and World Bank for more than a year. It wants a bailout package, grants and assistance worth around $7 billion. The government has held several rounds of talks with the two financial institutions but no agreement could be reached.

Both IMF and World Bank officials have been urging the Ethiopian government to adjust currency exchange rates. Ethiopian Birr is being traded at around 120 per dollar in black market, while official exchange rate is around 57 per dollar.

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