The National Bank of Ethiopia announces that the current currency of Ethiopia which is know as Birr has lost its value by 15% against foreign currencies the Ethiopian government made this Currency devaluations on October 11 2017 with an intention to boost export.
Many experts say that devaluations can be used by countries to achieve specific economic policies. The main benefits of having a weaker currency relative to the rest of the world is to boost exports, shrink trade deficits and reduce the cost of interest payments on its outstanding government debts.
However on the other side there is a risk that things might not work as planned because of the devaluation negative effects some of the most common dangers of weakening a currency include: Unstable market price, Loss of trust on the government and there would also be the currency and potential blowback the country will face from both domestic and international markets.
Even though the government says actions will be taken to stabilize the prices of commodities most of the citizens of Ethiopia are not happy with the currency devaluation as there would be rapid increment on the price of things which are exported from foreign countries.
Will this devaluation really favors Ethiopia? this would be the question which most of Ethiopians are eager to know about.Read more