APA-Addis Ababa (Ethiopia) The Governor of the National Bank of Ethiopia has dismissed speculation that the Ethiopian currency Birr would be devalued.
Governor Mamo Mihretu told local media over the weekend that there has been neither a discussion nor decision was made to devalue Birr, citing “extraneous speculations” on the issue.
According to the Governor, some traders are hoarding basic commodities and increasing their prices based on these “unfounded rumors”. “What they are doing is wrong and has to be corrected,” Mheretu said.
“We advised the public to follow the bank’s official statements only and not be distracted by baseless rumors.”
The NBE operates a managed exchange rate for the birr, allowing it to depreciate gradually against the dollar when needed.
Governor Miheretu said the central bank will continue to take sensible macro reform but not a mere devaluation.
In banks, the birr is currently being traded at 54.19 to the US dollar, but the exchange rate is much higher on the black market.
Authorities are currently preparing the second phase of the Homegrown Economic Reform Agenda (HGER II). Under this program, Mehretu said the NBE will continue to take actions to create stable and market-oriented forex, monetary and financial systems.
These steps include reducing the amount of currency circulating in the market and bringing borrowing by the government down to a low level.
In the past nine months of the current Ethiopian fiscal year, the total loans the financial sector disbursed reached 434 billion Birr (over $8 billion) , up by 69.7 percent , according to the NBE.
MG/as/APA