An International Monetary Fund (IMF) team and Ethiopian authorities have reached a staff-level agreement on the first review of Ethiopia’s four-year USD 3.4 billion Extended Credit Facility (ECF) program. Upon approval by the IMF Executive Board, Ethiopia will gain access to USD 345 million in financing.

The IMF team, led by Alvaro Piris, visited Addis Ababa from September 17 to 26, 2024, to assess the country's progress on economic reforms. The discussions focused on Ethiopia’s homegrown economic reform program, including its adoption of a floating exchange rate. The IMF acknowledged that the new exchange rate regime has significantly closed the gap between the official and parallel markets with minimal disruption to the economy.

Piris praised the reforms, stating, "The new exchange rate regime is alleviating the foreign exchange shortage, lifting a significant impediment to economic activity." He emphasized that Ethiopia's reform plan will help stabilize the economy, reduce inflation through tight monetary policy, and support growth.

The IMF team also held discussions with senior Ethiopian officials, including Finance Minister Ahmed Shide and National Bank Governor Mamo Mihretu, and engaged with banks and private companies. Formal approval of the agreement is expected in the coming weeks.

Source: The Ethiopian Herald