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Vol 65 No 16

Published 2nd August 2024


Ethiopia

Central bank floats birr to secure IMF deal

Foreign exchange reform will remove market distortions, but is the economy entering a danger zone of further devaluation and greater inflation?

The quid pro quo that Addis Ababa will gain from the international financial institutions and from sundry investors and creditors must have reassured Prime Minister Abiy Ahmed that he had covered the risks of a radical financial liberalisation plan. On 29 July, Abiy’s government floated the birr, a move timed to coincide with the approval of a US$3.4 billion programme from the IMF board. Long-awaited debt relief is likely to follow soon.

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