The Ethiopian central bank has removed all restrictions on trading the Ethiopian birr (ETB), in a move that analysts fear could stoke significantly higher inflation in the East African country. However, the IMF has insisted on foreign exchange liberalisation as a condition for Ethiopia receiving around $10.7 billion in external financing. In the first trading session after the central bank announced the forex regime, the birr slumped by 30% against the dollar. But the loan came only after Ethiopia agreed to end its fixed currency exchange rate. The nation’s current situation does not warrant a full-fledged liberalisation of the market, especially floating the foreign exchange market,” he told Disruption Banking.

Source: Ethiopian News July 31, 2024 07:46 UTC