Ethiopia Devalues Currency by 15 Percent

Ethiopia devalues currency by 15 percent to boost exports

ADDIS ABABA – Ethiopia’s central bank devalued the Ethiopian birr ETB= by 15 percent on Tuesday, its first such move in seven years to boost lagging exports.

The birr was quoted by the National Bank of Ethiopia at a weighted average of 23.4177 against the dollar on Monday, compared to what will be 26.9215.

“The devaluation was made to prop up exports, which have stagnated the last five years owing to the birr’s strong value against major currencies,” Yohannes Ayalew, the bank’s vice governor, told a news conference in the capital Addis Ababa.

The International Monetary Fund (IMF) and the World Bank, have both repeatedly urged Ethiopia to consider devaluing its currency to boost exports as they are mostly unprocessed products and need to stay competitive on price.

Ethiopia has operated a managed floating exchange rate regime since 1992.

The Horn of Africa country is the continent’s biggest coffee exporter but its total export revenue has been falling short of targets for the last few years owing to weaker commodity prices