The Ethiopian Birr depreciated further on Wednesday as the National Bank of Ethiopia (NBE) conducted a special foreign exchange auction.
The weighted average exchange rate settled at 107.9 birr per US dollar, marking a decline in the currency’s value.
A total of 27 commercial banks participated in the auction, according to the NBE.
The outcomes of this auction will be incorporated into the bank’s indicative daily exchange rate, which will be released on Thursday.
The recent devaluation of the Birr is part of Ethiopia’s broader economic reform agenda.
Last week, the country adopted a market-determined foreign exchange rate system, a crucial step towards securing a new loan program from the International Monetary Fund (IMF) and addressing a longstanding debt crisis.
Ethiopia has grappled with persistent economic challenges, including high inflation and acute foreign currency shortages.
The government hopes that the new exchange rate regime will attract foreign investment, boost exports, and stabilize the economy.