According to Hailemariam Desalegn, the currency devaluation by 15 taken in the second week of October by the National Bank of Ethiopia is necessary for the country’s exports, mainly agricultural products.
ADDIS ABABA (Xinhua)–Ethiopian Prime Minister Hailemariam Desalegn on Thursday (Oct. 26) backed the recent currency devaluation made by the Ethiopian National Bank as necessary to the country’s export trade.
Hailemariam Desalegn made the remarks while briefing the Ethiopian parliament regarding socio-economic direction for the just commenced 2017-2018 fiscal year.
According to Hailemariam Desalegn, the move to devalue the Ethiopian birr (ETB) by 15 percent as of October 11, 2017 is necessary for the country’s exports, mainly agricultural products.
“Ethiopian farmers who produce export-oriented agricultural products would benefit more, if the value of the Ethiopian birr is devalued as compared with the currency of importing countries,” Hailemariam said.
According to the National Bank of Ethiopia (NBE), the devaluation, due effective starting from the second month of the Ethiopian year, was made to achieve the target of increasing earnings from the export sector.
Yohannes Ayalew, Chief Economist and Vice Governor of NBE, on Tuesday indicated that Ethiopia’s export sector has been growing rapidly at 24.1 percent between 2003 and 2011.
According to Yohannes Ayalew, due to the decrease in prices of commodities at the global market, the country’s export performance declined between 2012 and 2016, affecting Ethiopia’s main export commodities such as coffee, oil seeds, leather and gold.
The national bank has also announced the plan to increase the interest rate on deposit from 5 percent to 7 percent.
Source: Xinhua
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