- cross-posted to:
- world@lemmy.world
- cross-posted to:
- world@lemmy.world
ADDIS ABABA, July 29 (Reuters) - Ethiopia’s central bank floated the country’s birr currency on Monday, a move it hopes will secure International Monetary Fund (IMF) support and make progress on a long-delayed debt restructuring.
The birr’s value against the U.S. dollar slumped by 30% to 74.73 per dollar, the country’s biggest lender, Commercial Bank of Ethiopia said. The currency had been trading at 57.48 birr to the dollar on Friday.
That’s often what happens when you float a currency because the peg tends to become overvalued. That leads to eventual capital flight and draining of foreign reserves.
Is nice to see the IMF pushing for floating currencies now. They used to push pegging the currency to attract foreign investment.