Ethiopia’s central bank announced on Monday that it was easing curbs on its foreign exchange regime, a move which saw the value of the local currency slide by about 30 percent.
The major reform comes as the country, the second most populous in Africa, awaits a long-negotiated deal on crucial funding from the International Monetary Fund.
The National Bank of Ethiopia announced a series of foreign exchange reforms which it said involved “significant new policy changes”.
The first measure was a “shift to a market-based exchange regime,” the NBE said in a statement.
“Banks are henceforth allowed to buy and sell foreign currencies from/to their clients and among themselves at freely negotiated rates, and with the NBE making only limited interventions to support the market in its early days and if justified by disorderly market conditions,” it said.
The US dollar was buying 74.73 birr and selling at 76.23, the leading Commercial Bank of Ethiopia said in a statement published on X. On Friday the buying rate was 57.48 and selling 58.64.
