IMF Executive Board approves 4-year $3.4B ECF arrangement for Ethiopia

As reported by IMF

Summary

• The IMF Executive Board has approved a 4-year Extended Credit Facility (ECF) arrangement for Ethiopia totaling approximately $3.4 billion, providing critical financial support for the country's economic reform program.
• The program is designed to support Ethiopia's Homegrown Economic Reform agenda, which aims to stabilize the economy, promote private sector development, and achieve sustainable growth.
• Key focus areas of the program include the transition to a market-determined exchange rate, which is essential for addressing forex shortages and reducing distortions in the economy.
• Debt sustainability is another central pillar, with the program supporting Ethiopia's efforts to restructure its external debt and put public finances on a sustainable path.
• The ECF also emphasizes fiscal consolidation, monetary policy modernization, and structural reforms to improve the business environment and attract investment.
• BirrValue review: The IMF program underpins Ethiopia's FX reforms. Compare bank rates on BirrValue—the market-determined regime means official channels are increasingly competitive with the parallel market.