Ethiopian Black Market

Price of US Dollar Reaches 150 Birr in Ethiopian Black Market

Price of US dollar has reached 150 birr in the Ethiopian black market. Since May last year, the Ethiopian government has been trying to kill the foreign exchange black market.

Today’s official birr-dollar exchange rate announced by the Commercial Bank of Ethiopia is 124.0086 birr per dollar. Last year, when the Ethiopian government introduced macro economic reforms, dollar was being sold for around 120 birr in black market while official price was 57 birr per dollar.

Ethiopian government liberalized foreign exchange market to narrow down the gap between official and black markets. Government authorized private banks and foreign exchange bureaus to buy and sell foreign exchange. The liberalization led to immediate depreciation in value of birr against dollar. The government had to implement the marco economic reforms to secure a bailout package from the International Monetary Fund and the World Bank. In recent months, Ethiopia signed $20 billion financing agreements with the two financial institutions.

Rising foreign currency price against birr in the Ethiopian black market is being attributed to economic uncertainty in the country. Debt restructuring agreement between Ethiopia and donor countries is still under consideration. Government has been working to enhance remittances and foreign direct investment, but no significant progress has been made.

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