Fun

Report: Gap Between Ethiopian Currency’s Official and Parallel Market Exchange Rate Grows to New Record

News Feed - 2022-09-25 06:09:02

Report: Gap Between Ethiopian Currency"s Official and Parallel Market Exchange Rate Grows to New Record


The Ethiopian birr currency’s parallel exchange rate against the U.S. dollar recently dropped to a low of 92 birrs per dollar, a report has said. The report added that following this latest plunge, the gap between the birr’s official and parallel market exchange rates has widened to a record high. Resumption of Fighting Between Ethiopian Government Forces and Tigray Rebels Identified as the Cause


The gap between the Ethiopian currency’s official and parallel market exchange rate against the greenback widened to a new record higher after the latter rate plunged 92 birrs for every dollar. Officially, one dollar buys 52.5 units of the local currency.


According to a Bloomberg report that quotes Fikadu Digafe, the vice governor and chief economist at the National Bank of Ethiopia (NBE), the resumption of hostilities in the Tigray region is one of the key factors that caused the Ethiopian currency’s latest plunge. As many media reports have suggested, the fighting between the Ethiopian government and Tigray rebels restarted in late August after five months of a lull in hostilities. High Cost of War Making Monetary Policies Ineffective


Explaining how the fighting impacted Ethiopia’s economy, Digafe identified the imbalance between the supply of foreign exchange and the demand as a problem that afflicts the country. In addition, the vice governor also suggested that the high cost of the war meant the NBE’s monetary policies are now largely ineffective.


Besides the costs associated with the fighting, Ethiopia has grappled with the problem of dwindling foreign exchange reserves. As per the report, the landlocked horn of Africa state’s reserves stood at $3.3 billion by the end of 2021. This was enough to cover Ethiopia’s import costs for just 1.9 months.


Therefore, as part of efforts aimed at boosting the country’s foreign exchange reserves, the NBE effectively devalued the birr by 26% between February and May. Also, as reported by Bitcoin.com News, the central bank has now imposed restrictions and controls on the amount of foreign exchange that Ethiopian residents are allowed to take out of the country.


Register your email here to get a weekly update on African news sent to your inbox:

Tags in this story Ethiopia Tigray conflict, Ethiopian Birr, Exchange rate, Fikadu Digafe, Foreign exchange, Monetary Policy, National Bank of Ethiopia, parallel market, reserves


What are your thoughts on this story? Let us know what you think in the comments section below. Terence Zimwara


Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route. Kenyan Central Bank Says It"s "Craziness" to Convert Country"s Reserves to Bitcoin AFRICA | 17 hours ago Africa-Focused Crypto Exchange Yellow Card Raises $40 Million via Series B Round AFRICA | 5 days ago


Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleRussia Starts Developing Mechanism for International Crypto Payments Next articleETH Merge Forks, Quantum Computing, Biden Draining Oil Reserves, DOJ Targets Criminal Crypto Use — Week in Review Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItFed"s Bullard Wants to Raise Bank Rate to 3.5% by Year"s End, Hints at 75 Basis Point Rate Hike


The 12th president of the Federal Reserve Bank of St. Louis, James Bullard, thinks the U.S. central bank can increase the benchmark bank interest rate by 75 basis points this year. Bullard believes the Fed could raise rates to 3.5% ... read more.Interest in Real Estate Investments in Spain Grew 400%, With Some Using Crypto and Stocks as Payment Method Digital Ruble ‘Much Needed,’ Russia’s Central Bank Says, Won’t Delay Testing Economist Predicts the Fed"s Response to Inflation Will Push Crypto Higher Microbt Reveals Latest Bitcoin Mining Rigs — Machines Produce up to 126 TH/s With Custom 5nm Chip Design

News Feed

Biden’s 44.6% capital gains tax proposal likely a ‘nothing burger’
Tom Mitchelhill3 hours agoBiden’s 44.6% capital gains tax proposal likely a ‘nothing burger’President Biden’s move to introduce a 44.6% federal capital gains tax probably wouldn’t affect most people in crypto,
Cardano Price Woes To Continue? Analyst Expects ADA To Fall To $0.47
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
North Korea used Tornado Cash to siphon HTX’s $147.5M loot: UN
Arijit Sarkar11 hours agoNorth Korea used Tornado Cash to siphon HTX’s $147.5M loot: UNA UN report reveals North Korean hackers laundered $150 million in stolen crypto assets through Tornado Cash in March 2024.797 Tota
Why Everyone Should Be Paying Attention to GensoKishi Online Metaworld
Why Everyone Should Be Paying Attention to GensoKishi Online Metaworld sponsored Most crypto-oriented gaming projects usually run on the likes of Ethereum (ETH), Solana (SOL), EOS (
Bitcoin’s Rapid Increase Should Compel Crypto Investors to Own Gold, Says Top Miner
Bitcoin"s Rapid Increase Should Compel Crypto Investors to Own Gold, Says Top Miner Sandeep Biswas, chief executive officer of Newcrest Mining, one of the world&
Mastercard Launches NFTs to Support Emerging Musicians Through Web3 Technologies
Mastercard Launches NFTs to Support Emerging Musicians Through Web3 Technologies According to Mastercard, the payments giant has launched non-fungible tokens (NFTs) that grant acce
Still Sleeping On XRP? Analyst Says $8 Breakout Is ‘Just Waiting’
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Meta won’t launch new AI products in EU, citing ‘regulatory uncertainty’
Tristan Greene6 hours agoMeta won’t launch new AI products in EU, citing ‘regulatory uncertainty’The door is now wide open for Google and Microsoft to gain first movers’ advantage over the entire continent.337 To
Bitcoin’s Inception: A 340-Page Book Compiles All of Satoshi’s Writings in Chronological Order
Bitcoin"s Inception: A 340-Page Book Compiles All of Satoshi"s Writings in Chronological Order Bitcoin’s mysterious creator, Satoshi Nakamoto, first appear
Tom Blackstone1 hour agoUS stocks rise as traders wait for inflation dataAll US stock indices rose on October 11, as traders awaited consumer price index data to be released on the 12th.247 Total views7 Total sharesListe
Onecoin Allegedly Tied to Racehorse Firm, Phoenix Thoroughbreds Removed from France Galop Race
Onecoin Allegedly Tied to Racehorse Firm, Phoenix Thoroughbreds Removed from France Galop RaceLast week the firm Phoenix Thoroughbreds was reportedly banned from horse racing in Fra
Televend’s Complex System of Telegram Drug Bots Swell as German Police Seize 9 Telegram Drug Channels
Televend’s Complex System of Telegram Drug Bots Swell as German Police Seize 9 Telegram Drug Channels During the last few months following the departure of the