Vancouver Ethiopian Blog

Ethiopian life in Vancouver, BC, Canada

Ethiopia Devalued Its Currency (The Birr) by 17 Percent Against the US Dollar

Ethiopia has devalued her currency, the Birr.

The Birr (ETB) has been declining in its value for the past several years now. During the communist Ethiopia era (1974 to 1991), the currency was held at a constant exchange rate of $1 USD to 2.10 ETB.

The current government devalued the Birr back in 1993 to about 1 USD = 5 ETB. Since then, the Birr has been falling against the dollar. For example, about 2 years ago, in 2008, the exchange rate was $1 USD to 9.50 ETB. Then, $1 USD was trading at about 13.75 ETB for the past year or so.

Now, in its most recent adjustment on September 1, 2010, the Central Bank of Ethiopia has set the exchange rate at $1 USD to 16.35 ETB (that is about 17% devaluation).

Birr to other currencies converter is found here. You can also find other currency converters here:

Yes, when the Birr is devalued, it is good for those of us living abroad as our money goes further. However, for the vast majority of Ethiopians who are living in the country (now over 80 Million), life will get expensive as Ethiopia is a net importer of goods; from gasoline to machinery, to consumer goods.

I hope that the Central Bank of Ethiopia (http://www.nbe.gov.et and http://nbebank.com) will find the best equilibrium for the exchange rate as a sharply fluctuating rate is not good for any nation.

Below is an article by Bloomberg news regarding the devaluation:

Source: Bloomberg

Ethiopia devalued its currency, the birr, by 17 percent against the dollar, the third such move in the past 14 months, according to the National Bank of Ethiopia.

The exchange rate was quoted at 16.351 per dollar today compared with 13.628 yesterday, according to the website of the Addis Ababa-based central bank. It was trading at 11.381 on July 10 last year.

The devaluation will crimp imports and make it easier to boost foreign currency reserves. Ethiopia needs to raise its reserves to 3 months of import cover from 2.3 months to cushion its economy from external shocks, a June report from the International Monetary Fund said.

There is a “need for a 10 percentage point real exchange rate depreciation” in order to achieve that goal, the IMF said in the report.

Ethiopia’s trade deficit was expected to grow to $7 billion in the fiscal year to July 7 from $6.3 billion the year before, according to IMF figures.

Where is the ETB exchange rate heading? As I mentioned in my previous post, the Birr exchange rate to the dollar is estimated at 22. It is being artificially kept at a higher level.

The above Bloomberg article also suggests that, the the Central Bank of Ethiopia might need to devalue the currency to about 18 ETB to the dollar in the near future. So, those of you residing abroad, wait a while before purchasing a big ticket item in Ethiopia; and those planning to sell in Ethiopia and bring your proceeds abroad might want to sell now before the ETB is devalued again.

Ethiopian Professor Seid Hassan Murray State University Department of Economics and Finance

Photo: Professor Seid Hassan

An Ethiopian professor of Economics, Seid Hassan, has written a detailed analysis of the exchange rate adjustment. You can read the article by clicking here.

My next blog entry will be on Thursday September 23, 2010.

Mullkam Samint!

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September 16, 2010 Posted by | Ethiopian Businesses, Ethiopian Calendar, Ethiopian Careers, Ethiopian Citizenship, Ethiopian Culture, Ethiopian Education, Ethiopian History, Ethiopian Holidays, Ethiopian Investments, Ethiopian Media, Ethiopian Parenting, Ethiopian Patriotism, Ethiopian Politics, Ethiopian Professors, Ethiopians & Technology, Ethiopians Back Home, Ethiopians in Vancouver | , , , , , , , , , | Leave a comment

Is Addis Ababa Really One of the Cheapest Cities in the World for Expats?

Addis Ababa, the capital of Ethiopia, has been ranked as one of the cheapest cities in the world by Mercer’s 2010 Cost of Living Survey.

Mercer’s Top 50 expensive cities are found here.

Addis Ababa is ranked at 208th position out of the 214 cities surveyed. According to the survey, “the cost of housing – often the biggest expense for expats – plays an important part in determining where cities are ranked”. Based on this fact, I expected Addis Ababa to be in the top 20.

Please keep in mind that the survey is for expatriates, not for local people. Typical expats in Addis Ababa include embassy officials, NGO employees and those in other similar positions.

I must say that I do not agree with the report when it comes to Addis Ababa. How can Addis Ababa be one of the cheapest cities in the world? A decent family home, say, 6 bed room house with 2,200 sq. ft with 7,000 sq. ft lot is going for $200,000 to 700,000 USD depending on the location of the property. You can check house for sale and rental prices at Ezega’s website.

The exchange rate for $1 USD is about $13.75 EBR (Ethiopian Birr).

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July 8, 2010 Posted by | Canadian Patriotism, Ethiopian Businesses, Ethiopian Careers, Ethiopian Citizenship, Ethiopian Culture, Ethiopian Education, Ethiopian Food, Ethiopian History, Ethiopian Holidays, Ethiopian Investments, Ethiopian Media, Ethiopian Parenting, Ethiopian Patriotism, Ethiopian Politics, Ethiopians & Technology, Ethiopians Back Home, Ethiopians in Vancouver | , , , , , , , , , , , , , | 1 Comment

Sending Money to Ethiopia

Sending money oversees is way to complicated! But, does it have to be? If you are sending money, for instance, to Europe from Canada or US, then you have many choices:

  • Money Orders – via banks, post office, etc.
  • Cash Transfers – via agents like Western Union, etc.
  • Bank Transfers – via banks in wires, cheques, drafts, etc.

These services are very expensive both to the sender and recipient. The sender pays outrageous service fees and the recipient also gets dinged service fees in addition to lower exchange rates.


Photo: 1985 Ethiopian Gold Coin – showing a value of $400 Birr – worth a lot more at the present!

But, if you are sending money to Ethiopia, your options are limited. Most people in North America send money to Ethiopia using local licensed agencies rather than big corporations. These local agencies are mostly run by other fellow Ethiopians.

The service fees by the corporations are way to high, and also small local agencies give you the best exchange rates.

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April 1, 2010 Posted by | Ethiopian Businesses, Ethiopian Careers, Ethiopian Citizenship, Ethiopian Culture, Ethiopian Education, Ethiopian Food, Ethiopian History, Ethiopian Holidays, Ethiopian Investments, Ethiopian Media, Ethiopian Parenting, Ethiopian Patriotism, Ethiopian Relationships, Ethiopian Religions, Ethiopian Socials, Ethiopians & Technology, Ethiopians Back Home, Ethiopians in Vancouver | , , , , , , , , , , , , , , , , , , | Leave a comment