The US Dollar exchange rate to Ethiopian birr reached all-time high. One US dollar is fetching up to 75 birr in the black market in some Ethiopian cities
The change in dollar exchange rate that went through in Ethiopia in the past thirty years could be incredible. Around 1990, the final years of Colonel Mengistu Hailemariam’s government, 1 U.S. dollar was exchanged in the range of 2 to 2.5 Ethiopian birr.
Unbelievable rate of inflation, and many seem to believe that it was manipulated through multilateral financial institutions, in the last three decades make that sound like impossible.
Even in the past few years, the US dollar was exchanging under 30 Ethiopian birr. In fact, 30 was a black market rate.
Now one US dollar is exchanging up to 75 Ethiopian birr in the black market, according to a report by Deutsche Welle Amharic report.
Addis Ababa, Adama and Hawassa are among cities where exchange rates for hard currencies , including Euro, showed unprecedented increase.
Exchange rate at government owned financial institutions, for buying, is 45.51 ,as reported by DW Amharic.
The war in Northern Ethiopia, the TPLF triggered it when it attacked the Ethiopian Defense Force bases in November 2020, and the instability in most parts of the country are among the factors that are said to have contributed to the skyrocketing exchange rate of the dollar.
The Ethiopian government is struggling to control the black market currency exchange, but the effort does not seem to be a success.
Ethiopia has been facing hard currency shortages since Prime Minister Abiy Ahmed came to power about three years ago. It is still not resolved, and the black market is anticipated to worsen the situation.
The DW Amharic report indicated that if the situation is not reversed, it could lead to an unprecedented economic crisis in the country.
Join the conversation. Like borkena on Facebook and get Ethiopian News updates regularly. As well, you may get Ethiopia News by following us on twitter @zborkena