Ethiopia adopts market-based FX system, birr currency slides
Updates with birr currency slide
By Dawit Endeshaw
ADDIS ABABA, July 29 (Reuters) -Ethiopia's central bank on Monday removed restrictions on the foreign currency market, it said, a crucial step towards securing funding from the International Monetary Fund and making progress on a long-delayed debt overhaul.
The birr currency sank 30% against the dollar to 74.73 per dollar, the biggest commercial lender said, after the removal of restrictions. The currency was trading at 57.48 against the dollar on Friday.
Last December, the Horn-of-Africa nation which is struggling with high inflation and chronic foreign currency shortages, became the third economy on the continent in as many years to default on its debt.
It has been in talks with the IMF since last year to establish a new lending program, after the last fund-supported program agreed in 2019 was abandoned due to conflict in the northern region of Tigray that ended with a November 2022 peace deal.
"Banks are henceforth allowed to buy and sell foreign currencies from/to their clients and among themselves at freely
negotiated rates, and with the NBE (National Bank of Ethiopia) making only limited interventions," the central bank said in a statement.
The reforms were initially announced by Prime Minister Abiy Ahmed late on Sunday.
As part of the reforms, Ethiopia will get $10.7 billion in external financing from its development partners, said Mamo Mihretu, the central bank governor, in a video released online.
"This support includes exceptional financing from the IMF, the World Bank, and Creditors," he said.
"The IMF and World Bank are both providing exceptional and front-loaded funding support that will be among their highest such allocations in the African continent."
There was no immediate comment from the IMF.
Africa's second-most populous country requested a debt restructuring under the Group of 20's Common Framework process in early 2021, but progress was slowed by the civil war in the northern Tigray region that lasted two years.
The government in Addis Ababa had already unveiled some economic reforms, which analysts say are linked to the negotiations for a new IMF reform program, including the adoption of an interest rate-based monetary policy earlier this month.
Reporting by Dawit Endeshaw; Writing by Duncan Miriri; Editing by Shri Navaratnam and Sharon Singleton
免責聲明: XM Group提供線上交易平台的登入和執行服務，允許個人查看和/或使用網站所提供的內容，但不進行任何更改或擴展其服務和訪問權限，並受以下條款與條例約束：（i）條款與條例；（ii）風險提示；（iii）完全免責聲明。網站內部所提供的所有資訊，僅限於一般資訊用途。請注意，我們所有的線上交易平台內容並不構成，也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。
所有缐上交易平台所發佈的資料，僅適用於教育/資訊類用途，不包含也不應被視爲適用於金融、投資稅或交易相關諮詢和建議，或是交易價格紀錄，或是任何金融商品或非應邀途徑的金融相關優惠的交易邀約或邀請。
本網站的所有XM和第三方所提供的内容，包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接，皆爲‘按原狀’，並作爲一般市場評論所提供，而非投資建議。請理解和接受，所有被歸類為投資研究範圍的相關内容，並非爲了促進投資研究獨立性，而根據法律要求所編寫，而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊，相關詳情請點擊 這裡查看。
