Ethiopia & IMF Discuss Birr Exchange Rate Distortions
The Ethiopian Embassy in the US confirmed on Friday that ongoing talks between Ethiopia and financial institutions focused on Birr exchange rate distortions along with other points.
A senior Ethiopian delegation, led by Finance Minister Ahmed Shide, is in talks with International Monetary Fund (IMF) and World Bank (WB) officials these days. Mamo Mihretu, the Ethiopian National Bank Governor, is also part of the delegation. The delegations has held high level meetings in the US including a meeting with IMF managing director Kristalina Georgieva.
Ethiopia has been in talks with the IMF and World Bank for almost a year, hoping to get a bailout package for its troubled economy. Reportedly, Ethiopia is hoping to get a loan of around $3 billion. One of key decisions to be made by the Ethiopian government is devaluation of its currency birr.
The birr is trading around 117 per dollar in black market while its official exchange rate is around 57 per dollar. Ethiopian Embassy in the US, through a social media post, confirmed on Friday that the Ethiopian delegation and international financial institutions were discussing liberalization of Ethiopian economy, birr exchange rate distortions and other issues.
IMF and World Bank are urging Ethiopia to make its official birr exchange rate realistic. It seems to be one of the pre conditions to be met by Ethiopia before approval of any bailout package by IMF. While birr devaluation will surely increase inflation, Ethiopian government will have to make a decision in this regard in coming days.
Originally written by: https://myviewsonnews.net/ethiopia-imf-discuss-birr-exchange-rate-distortions
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