Floating Currency: The Life Jacket of Ethiopia’s Sinking Economy?
It has finally happened. After many rumors and reports, Ethiopia’s currency devaluation has become a reality.
On Monday, the National Bank of Ethiopia lifted restrictions on the foreign currency market. This move, which is known as floating a currency, is part of the government’s strategy to secure over $10 billion in funding from the IMF and World Bank and to restructure the country's debt following a default in December. International bodies have shown support for the move, with the World Bank approving a grant of 1 billion dollars on Tuesday and the United States Embassy stating approval for the move. Now, there’s much talk about the advantages and disadvantages of floating the Birr. But before that, let’s see what it means to float a currency.