IMF Wants Ethiopian Currency to be Devalued by 60%

  Sajid Nadeem   April 21, 2024  

International Monetary Fund (IMF) is pushing for the Ethiopian currency to be devalued by 60% before the approval of a $3.5 billion loan. High level talks are in progress in the US between a senior Ethiopian delegation and the representatives from the IMF and World Bank.

“Negotiations are ongoing,” IMF Mission Chief for Ethiopia Alvaro Piris Chavarri told reporters today. “There are still differences.”

“I’m cautiously optimistic,” he said, declining to give details of the differences still to be resolved. “Discussions take the time they take.”

Reportedly, Ethiopia is hesitant to devalue Ethiopian currency at once. It wants to devalue birr gradually. It is offering to depreciate birr by around 15% at the start, gradually lowering it to 35%. While the IMF team wants 60% depreciation at the beginning.

The Ethiopian embassy in the US confirmed on Friday that the Ethiopian delegation and international financial institutions were discussing “liberalization” and “FX distortions”. Read more…

Ethiopian currency birr has lost its value considerably. While official exchange rate is around 57 birr per dollar, in black market it is around 117 birr per dollar.

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