At the end of every report done by the International Monetary Fund (IMF) about Ethiopia, it is normal to find a statement calling for further flexibility in the exchange rate regime of the country. Officials of the IMF have a firm position that the overvaluation of Birr is the major reason why Ethiopia’s export proceeds are not growing and the country is experiencing a foreign currency shortage. They believe the fast depreciating Birr, a prerequisite put to access loans from the IMF, would help Ethiopia boost exports, while it reduces its imports.
Fast depreciating Birr propels cost of production
By: Samson Berhane
Published On: December 25, 2021