The Birr was devalued against a basket of major currencies twice over the last almost three decades. The first one was in 1992, when a new government under the late Meles Zenawi devalued the Birr from 2.07 to a dollar to five Birr. Following a series of depreciation since, the National Bank of Ethiopia (NBE) trimmed the currency by 17pc in 2010. Macroeconomists warned of major inflation as a result, and they were not wrong. Inflation picked up following the devaluation and before 2012 had reached 40pc to the exasperation of consumers.
Seven years went by and inflation came down to the single digits until only interrupted by the El Nino-induced drought in the mid-2010s. But in October 2017, the central bank took another slice out of the value of the Birr, this time with officials promising that inflation would not pick up. But it did and currently, together with a creeping 10-cent a day devaluation of the Birr in the last months of 2019, the inflation rate broke past 20pc, an amount as high as in 1992 but half it was recorded in 2008s historical high.
Increasing export earnings had been one of the main justifications for this policy. But neither the devaluation in 2010 nor in 2017 has been followed by an improvement to the state of the external sector. Now, as in then, revenues from the export of goods lies dormant at below three billion dollars.
PUBLISHED ON
Jan 05,2020 [ VOL
20 , NO
1028]
Addis Fortune | Sep 27,2020
News Analysis | Jan 05,2020
Radar | Jun 11,2024
Editorial | Nov 15,2025
Money Market Watch | Sep 27,2025
Radar | Sep 08,2019
Commentaries | Jul 03,2021
Money Market Watch | Nov 29,2025
Verbatim | Oct 23,2021
Dec 22 , 2024 . By TIZITA SHEWAFERAW
Charged with transforming colossal state-owned enterprises into modern and competitiv...
Aug 18 , 2024 . By AKSAH ITALO
Although predictable Yonas Zerihun's job in the ride-hailing service is not immune to...
Jul 28 , 2024 . By TIZITA SHEWAFERAW
Unhabitual, perhaps too many, Samuel Gebreyohannes, 38, used to occasionally enjoy a couple of beers at breakfast. However, he recently swit...
Jul 13 , 2024 . By AKSAH ITALO
Investors who rely on tractors, trucks, and field vehicles for commuting, transporting commodities, and f...
Jun 20 , 2026
When Parliament takes up the appropriation bill, federal legislators will receive a d...
Jun 13 , 2026
The recent policy decision to fully open freight forwarding to foreign capital may be...
Jun 6 , 2026
For a political veteran as controversial as Getachew Reda, last week's national elect...
May 30 , 2026
Tomorrow, millions of Ethiopians are expected to vote in the seventh national electio...
Loading your updates...