Borkena
Toronto – The Ethiopian Birr has lost 128 percent of its value against the U.S. Dollars in about ten months, BBC Amharic highlighted in a report published today.
When the change to forex was introduced in Ethiopia in July 2024, $1U.S. dollar was exchanging for 57.48 Ethiopian birr, and has been growing since then. At this point it is fetching 131 Ethiopian birr after the commercial bank of Ethiopia announced an addition of seven birr in a span of a week.
BBC Amharic cited that Commercial Bank of Ethiopia (CBE) and Dashen Bank were buying US dollars for 131 birr. Their selling prices showed a difference of over 1.50 birr. While CBE was selling for 133, Dashen bank was selling for 134.5 birr.
The government has been making claims that the foreign exchange regime change was introduced to narrow the difference with parallel market. However, it did not achieve that. Sources indicate the U.S. dollar has been selling for over 160 birr. In fact, before the introduction of the market-based currency exchange regime, the difference with the parallel market was over 100 percent.
The National Bank of Ethiopia has been selling Foreign currency to banks in auction since a few months after the introduction of the new macro-economic policy. The sixth bi-weekly foreign exchange auction was held last Thursday and a total of $50 million birr was made available.
Prime Minister Abiy Ahmed’s administration agreed to what appears to be an IMF imposed condition to make changes to the fixed foreign exchange regime in the country and introduced a “market-based” one so as to access a $10.7 billion extended credit facility from the monetary institution.
The change has resulted in unprecedented increase on the price of commodities worsening the unbearable cost of living. Yet, the National Bank of Ethiopia has recently been making claims that inflation rate has shown remarkable decrease. In late April, Reuters reported, citing the bank, that the rate for March this year was only 13 percent.
The government pledged to increase salaries for low income public servants but it has not been implemented for more than six months now. There have been complaints that public servants in some parts of the country did not get their salaries for months. Health Professionals in the country started a full strike last week after carrying out a month long partial strike demanding the government to pay them a livable salary.
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