IMF

Ethiopia to save $4.9B in debt relief with new restructuring plan

Business /

Ethiopia is set to reduce its debt repayments by $4.9 billion as it finalizes its debt restructuring, State Finance Minister Eyob Tekalign announced Friday. The move follows the country’s recent agreement with the International Monetary Fund (IMF) for a new financing program. The debt overhaul will involve negotiations with individual creditors over the coming months, with expected savings including $200 million from restructuring a $1 billion Eurobond. This process aims to adjust the bond’s nominal value. Prime Minister Abiy Ahmed also addressed recent economic reforms, including the switch to a market-determined foreign exchange rate. The Ethiopian birr, which floated freely starting Monday, has depreciated by 31.5% against the dollar, causing concern over potential inflation. Abiy emphasized that the adjustment aimed to unify disparate exchange rates rather than devalue the currency. Meanwhile, the federal trade ministry has closed over 700 shops for unjustified price hikes, as part of efforts to control inflation. The reforms, which also include lifting foreign exchange restrictions, are expected to encourage private sector growth and enhance long-term economic stability, despite concerns from some local governments about the impact on low-income households.

Ethiopia to save $4.9B in debt relief with new restructuring plan Read More »

Ethiopia clinches deal with IMF for $3.4B in financing

Business /

Ethiopia has secured an agreement with the International Monetary Fund (IMF) for a new financing program valued around $3.4 billion, the IMF announced Monday. The new four-year loan program will help support the country’s economic reform agenda. The approval of the loan agreement allows for the immediate disbursement of around $1 billion, the IMF said in a statement. The agreement follows extensive talks between Ethiopia and the IMF to secure more funding and restructure the country’s debt. As part of the discussions, Ethiopia has taken significant steps, such as the central bank allowing the country’s currency to float, which has led to a 30% devaluation of the Ethiopian birr against the US dollar. “The recent measures to decisively tackle macroeconomic imbalances, including moving to a market-determined exchange rate, removing current account restrictions, and modernizing the monetary policy framework to control inflation are critical steps forward,” the IMF said in a statement. In return for these measures, Ethiopia is expected to receive a $10.7 billion loan package from the IMF, the World Bank, and other creditors.

Ethiopia clinches deal with IMF for $3.4B in financing Read More »

Scroll to Top