IMF Staff Country Reports

The Federal Democratic Republic of Ethiopia: First Review Under the Extended Credit Facility Arrangement, Request for Modification of Performance Criteria, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for The Federal Democratic Republic of Ethiopia

November 4, 2024

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Format: Chicago

International Monetary Fund. African Dept. "The Federal Democratic Republic of Ethiopia: First Review Under the Extended Credit Facility Arrangement, Request for Modification of Performance Criteria, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for The Federal Democratic Republic of Ethiopia", IMF Staff Country Reports 2024, 318 (2024), accessed December 23, 2024, https://doi.org/10.5089/9798400291340.002

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Summary

The Board approved Ethiopia’s request for a four-year arrangement under the Extended Credit Facility (ECF arrangement) in July 2024 to support the authorities’ program aimed at addressing macroeconomic imbalances, restoring external debt sustainability, and laying the foundation for high, private sector-led growth. The transition to a market-determined exchange rate has been progressing well with a significant narrowing of the spread between the parallel and official market rate and no signs of significant inflationary pressures, albeit the supply of foreign exchange (FX) to the market has picked up more slowly than anticipated with some unmet demand persisting. With economic agents still adjusting to the new FX regime, persistent uncertainty, and seasonal lows in export earnings, it is too early to draw definitive conclusions on the full effects of the exchange rate reform.

Subject: Commercial banks, Currency markets, Exchange rates, External debt, Financial institutions, Financial markets, Foreign exchange

Keywords: Authorities' fiscal policy, Authorities' monetary policy reform, Commercial banks, Currency markets, ECF arrangement, Exchange market policy, Exchange rates, FX market development, Global, IMF policy requirement, Interest rate, Policy discussion

Publication Details

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