Ethiopia’s recent macroeconomic reforms, supported by the International Monetary Fund (IMF) and the World Bank, could have profound implications for the country and the region. The key reforms include the use of a floating exchange rate system and of interest rates as a policy tool.
They were introduced just ahead of the approval of a financial package that could eventually amount to about US$20 billion by the IMF and the World Bank. Ethiopia is also expected to save about US$5 billion from its credit restructuring following the IMF deal.
The financial package aims to tackle pressing issues such as inflation, foreign exchange shortages and debt sustainability.
