Ethiopia Insight published on 5 November 2024 a commentary titled "Now the Birr Floats, Will Ethiopia Sink or Swim?" by Muktar Ismail, regional analyst and former advisor to the president of Somali Region.
Last July, Ethiopia adopted a market-determined exchange rate, lifted most current account restrictions, and modernized its monetary policy framework in order to pave the way for International Monetary Fund and World Bank bailouts.
Ethiopia has regressed from two decades of economic and social progress and faces growing economic challenges. The recent economic policy reform has witnessed a plummeting depreciation of the currency and strong inflationary pressure. The author concludes that IMF and donor financing are unlikely to stabilize an economy plagued by conflict, poor management, and rapid currency depreciation.
