IMF to Ethiopia: Keep the Brakes On and Be Ready to Tighten Again

As reported by Capital Newspaper

Summary

• Alongside the completion of the fifth Extended Credit Facility review, the IMF urged the National Bank of Ethiopia to maintain a tight monetary policy stance and to stand ready to tighten further if second-round inflation pressures re-emerge. The advice followed a rebound in inflation, which rose back into double digits and reached 13.4 percent in May 2026 after falling to 9.7 percent in February 2026, driven mostly by food and imported fuel costs.
• The National Bank of Ethiopia has kept its policy rate high and held a cap on bank credit growth as its main tools to contain inflation. The IMF noted that the disinflation trend remains fragile, and that global commodity shocks linked to conflict in the Middle East have added to price pressure. Staying restrictive is meant to anchor inflation expectations and protect the value of the birr while the broader reform program continues.
• For BirrValue users, a continued tight stance means interest rates and liquidity conditions will likely stay restrictive in the near term. Higher inflation reduces the purchasing power of the birr, so remittance recipients may find their birr buys less than before. Watch for the next monetary policy update and compare rates across banks on [BirrValue](/banks) to get the most birr for your money.