Ethiopia calls rumors of a depreciation of the birr "absolutely baseless."

According to Ethiopia's junior finance minister, rumors that the birr currency will be depreciated are "absolutely untrue" as the nation applies for an IMF loan after agreeing to a ceasefire in its two-year civil conflict.

According to Refinitiv Eikon statistics, the birr presently exchanges for 53.42 to the US dollar, but it is apparently worth 96 to 97 on the black market, and the nation suffers long-standing foreign exchange shortages.

Eyob Tekalign, a state minister in the Ministry of Finance, stated on Twitter on Thursday that there is a "widespread notion that a devaluation is in the works." It's simply a rumor, says I. utterly unfounded Although a sensible macroreform is always on the table, there should be no worry about a simple devaluation.

Ethiopia manages the birr's currency rate, allowing it to appreciate against the dollar gradually. To address an inflated currency and a lack of foreign exchange, the IMF suggested switching to a market-determined exchange rate in 2020.

Early in 2021, the second-most populous nation in Africa asked for debt restructuring, but the two-year civil conflict in its Tigray area slowed down the process.

On November 2, the Tigray People's Liberation Front, a former rebel group that has since become a political party, and the government of Ethiopia reached a cease-fire. More than two million people were displaced by the conflict, which also had a negative impact on the economy.

The IMF, which demands debt relief promises from a country's creditors before it agrees to a loan program, has been approached by the government for assistance.

The IMF frequently demands that countries adopt an exchange rate that is more flexible. For instance, after switching to a more market-determined FX regime in accordance with the terms of an IMF program, Egypt's pound declined.

In an interview with Reuters in October, Eyob said, "We've made it very obvious we want to modernize our forex system, so the exchange rate unification remains one major policy goal, but we are just implementing it gradually."