Ethiopian currency birr has fallen to new record low against US Dollar and other currencies. The fall is more explicit in the Ethiopian black market.
Today, the Ethiopian birr fell to 190 against US dollar in parallel market. However official birr-dollar exchange rate is around 156. The decline in the value of birr began in July 2024 when the Ethiopian federal government introduced macroeconomic reforms and liberalized currency exchange market. Back then, official birr-dollar exchange rate was 56 but in parallel market it was around 120. Ethiopian government had to liberalize the currency exchange market in 2024 as it was one of the pre conditions laid out by IMF and World Bank, which gave a multi billion dollar bailout package to the Ethiopian government.
Prime Minister Abiy’s government has been trying to launch a crackdown on parallel market inside and outside Ethiopia. But the government could not kill the flourishing black market where US dollar and other foreign currencies can easily be purchased and transferred.
Last year, the Ethiopian government launched a massive crackdown in Tog Wajale town which is seen as the hub of currency black market. Reportedly, requested by the Ethiopian government, last year Federal Bureau of Investigation in US raided several money exchange companies in US which were allegedly involved in participating in activities in the Ethiopian currency black market. However it seems that killing the currency exchange black market in Ethiopia remains an uphill task.