The National Bank of Ethiopia has announced a devaluation of the country’s currency, by 15% effective Wednesday, October 11, 2017.
The devaluation is the first since 2010, interest rates on deposits have been pushed up by 2%, it will now stand at 7%, pegging the Birr at 26.91 to the dollar, up from 23.40 Br on the official market.
NBE’s vice governor and chief economist, Mr Yohannes Ayalew said the measure was to control inflationary pressure and boost export earnings which had hitherto stagnated.
Ethiopia’s economy is one of the fastest growing in Africa, with the IMF expecting a growth rate of 9 percent for the 2016/17 fiscal year.
Addis Ababa earned $2.9 billion in the 2017-2018 fiscal year, versus a target of $4 billion. The central bank said the it raised the main interest rate to 7 percent from 5 percent to stimulate savings as well as to counter inflation.