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HomeNewsEthiopia’s National Bank reportedly contemplating devaluing Birr, local currency

Ethiopia’s National Bank reportedly contemplating devaluing Birr, local currency

The Bank denies that the reports are false

Mamo Mihretu
Mamo Mihretu, Governor of National Bank of Ethiopia (Photo : Public Domain)

By Staff Reporter

ADDIS ABABA -(BORKENA) – National Bank of Ethiopia (NBE) is planning to significantly narrow the wide gap between the legal foreign exchange rate and the commonly called black market exchange rate, sources said.

The Amharic Weekly, the Reporter said in its Sunday issue that the National Bank of Ethiopia has its plans to reduce the wide gap between the legal and black market of the foreign exchange rates by 95 percent, but it did not mention when and how this plan would be implemented.

This was heard while NBE presented its quarterly performance report to the parliament on November 29, 2023. The Standing Committee on Budget and Finance with the House of Peoples’ Representatives reviewed the 2016 Ethiopian Fiscal Year’s first quarter performance plan of the National Bank of Ethiopia.

Although the National Bank did not officially present this plan at the Standing Committee’s review forum, a House member who saw the document forwarded a question to the Standing Committee saying that he saw the plan in the report and asked for further explanation.

This Member of the House of Peoples’ Representatives said that,  “the NBE has a plan to close the difference between the legal foreign exchange rate and the black market by 95 percent. But currently, the difference between the legal exchange rate and the black market is twofold. So, is the plan to close the gap by 95 percent realistically possible? Or does the Bank intend to do devaluation (to weaken the purchasing power of Ethiopian birr)?”, the Reporter said. 

The Governor General of the NBE, Mamo Mihiretu, said in a response to the question put to him by the MP that there would be steps taken depending on the situation, “but the National Bank cannot say this step will be taken at this time”.

The Governor General added, “I cannot say everything here regarding the foreign exchange issue. Our discussion on certain issues concerning the National Bank should not be open to inappropriate speculation. Discussing an issue that has not been digested well doesn’t make any sense”.

The main thing that should be discussed is the objective of the bank, according to Mamo. “The main objective of the bank is to establish stable price conditions and a foreign exchange system,” the Governor General of NBE said.

The National Bank of Ethiopia has announced in its recent release that what the Weekly Amharic, Reporter stated about the plan by NBE to change the foreign exchange rate in the near future “is false and misleading” 

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3 COMMENTS

  1. The issues of doller exchange in ethiopia must government take the action for both ethiopian and foreigners b/c this situation accelerating materials going high

  2. How on Earth does NBE governor thinks to narrow the gap between? The black market is not the problem but the import export is! Without capacitating the local market/manufacturing, services, and other export inputs to the global Markets to earn more hard currency the issue will never be solved. The more import need escalates with no cash the more black market value increase. If this rumours become real, the next morning black market will value in another 105%.

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