Ethiopia Secures $3.4 Billion IMF Loan After Floating Currency

Ethiopia has secured a $3.4 billion loan from the IMF after floating its currency as part of the reforms to ease the country’s foreign currency shortages and attract foreign investments.
IMF says the four-year financing package will support the authorities’ Homegrown Economic Reform Agenda to address macroeconomic imbalances, restore external debt sustainability, and lay the foundations for higher, inclusive, and private sector-led growth.
The National Bank of Ethiopia has maintained a managed FX rate system, causing chronic dollar shortages affecting importers and foreign investors repatriating profits.
The birr slumped 30% to 74.73 per dollar after the central bank removed restrictions on the FX market and committed that the regulator would only make limited interventions.