Ethiopia Devalued Birr By 15%

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The national bank of Ethiopia has just announced the devaluation of birr by 15% starting from tomorrow October 11, 2017, as reported by Fana Broadcasting network. The rationale behind the devaluation is to increase foreign trade. The bank has also announced the lower saving accounts interest rates have grown from 5% to 7%.

The reason for the decision to devalue the birr is since foreign trade has declined over the past 5 years and the Birr is considered to be overvalued. This means that the exchange rate is higher than the general price of other countries. However, frequent devaluation indicates that the tactic isn’t, in reality, successful and that further inflation is a high risk, especially in the current Ethiopian economic condition.

Many economists believe that a weaker currency is actually quite beneficial in terms of securing export revenues, decrease trade deficits and reduce debts of the country, as it is believed that the revenue secured from the aforementioned foreign trade could be utilized to pay off foreign debt.

In circumstances such as this, where the currency is devalued suddenly and drastically, there is a fear that an unfair result would be unavoidable; the interests of some might fall into risk. This is due to the considerable imbalance of power between those who have a direct economic connection with the export revenue and those that have less economic power.

The items Ethiopia exports are what determine the success, or otherwise, of the decision to devalue the currency. In the past, Ethiopian export performance wasn’t as expected. Nevertheless, demand for birr is expected to rise; starting from tomorrow, the value of one dollar will go from 23.4177 to 26.9303 with an increase of 15%.

6 COMMENTS

  1. The mostly Wolaita and Gurage (Southern People) gangs are involved in extortion in the diaspora .These gangs who operate allover the diaspora claim be using extortion to get the looted money that TPLF/OPDO officials are transferring to the diaspora. Many people are being held at gunpoint and even taken to banks to clean out their accounts with a person holding their hands threatening to infect them with AIDS virus unless they handover all their money to the mostly Wolaita and Gurage (Southern People) gangs operatives .

    In the diaspora extortion is getting very common since most Woyanes are running to the diaspora carrying cash on themselves. These extortion done by the Wolaita and Gurage (Southern People) gangs is done mostly in the diaspora targeting newly arrivals corrupt Woyane officials or also by targeting the Woyane officials children who are attending Universities in the diaspora .

    Woyane officials who are currently running from Ethiopia to the diaspora, with their looted money to the diaspora after the recent crackdowns on corrupt TPLF/OPDO officials went underway giving many officials the chance to transfer their money to the diaspora driving 1 dollar to be close to 40+ birrs in Ethiopia where these Woyanes are buying the dollars .Maybe soon they will have to pay close to 100 since foreign currency is almost impossible to find in Ethiopia with almost all corrupt officials families Woyanes are changing their Birrs to dollars getting ready to run out of the country. These corrupt Woyanes got too many anti-corruption spies watching their movements they can not even go to regular black market to buy dollars by paying birrs, they pay few more Birrs extra just to escape the Anti-corruption investigation spies radar, only to reach to the diaspora where the Wolaita and Gurage (Southern People) gangs take their money from their nerd children through extortion.

    Extortion (also called shakedown, outwrestling and exaction) is a criminal offense of obtaining money, property, or services from an individual or institution, through coercion. It is sometimes euphemistically referred to as a “protection racket” since the racketeers often phrase their demands a payment for “protection” from (real or hypothetical) threats from unspecified other parties; though often, and almost always, the person or organization offering “protection” is the same one willing to cause harm if the money is not paid, and such is implied in the “protection” offer. Extortion is commonly practiced by organized crime groups. The actual obtainment of money or property is not required to commit the offense. Making a threat of violence which refers to a requirement of a payment of money or property to halt future violence is sufficient to commit the offense.

  2. This is very right economic measure, in my openion birr is still overvalued. Our economy highly demand hard currency and we have to export more by deducting our commodity price in the market.

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