Dollar Exchange Rate In Ethiopia Black Market Today
The Ethiopian Birr has been the official currency of Ethiopia since 1945. However, due to inflation and economic instability, the black market for foreign currency in Ethiopia has become a common phenomenon. The US Dollar is the most sought-after foreign currency in Ethiopia, and its exchange rate in the black market is a topic of interest for many people.
Current Dollar Exchange Rate in Ethiopia Black Market
The current exchange rate of the US Dollar in the Ethiopian black market varies from day to day. As of August 2021, the exchange rate is around 1 USD = 45 ETB. However, it is important to note that the exchange rate can fluctuate widely and rapidly, depending on various factors such as political instability, inflation, and the availability of foreign currency.
Reasons for High Demand for US Dollar in Ethiopia
There are several reasons why the US Dollar is in high demand in Ethiopia:
- Importing goods and services: Ethiopia is heavily dependent on imports, and most of the foreign goods and services are priced in US Dollars. Therefore, businesses and individuals need to have US Dollars to pay for their imports.
- Traveling abroad: Many Ethiopians travel abroad for various reasons such as tourism, education, and medical treatment. They need US Dollars to pay for their travel expenses and other related costs.
- Investments: Some Ethiopians prefer to invest their money in foreign currencies such as the US Dollar, as they perceive it as a safer and more stable investment option.
Consequences of Black Market Exchange
The black market for foreign currency in Ethiopia has several consequences:
- Illegal activity: The black market is an illegal activity, and those who engage in it risk facing legal consequences.
- Inflation: The high demand for US Dollars in the black market can lead to inflation in Ethiopia, as it increases the demand for foreign currency and reduces the supply of Ethiopian Birr.
- Loss of foreign exchange reserves: The black market can lead to a loss of foreign exchange reserves for the Ethiopian government, as people tend to hoard foreign currency instead of depositing it in banks.
- Unstable economy: The black market can contribute to an unstable economy, as it undermines the official exchange rate and reduces confidence in the local currency.
Efforts to Curb the Black Market
The Ethiopian government has taken several measures to curb the black market for foreign currency:
- Legalization of foreign currency: In 2019, the Ethiopian government legalized the holding of foreign currency by Ethiopians and foreign nationals living in Ethiopia. This has encouraged people to deposit their foreign currency in banks, rather than hoarding it.
- Strengthening of banks: The government has also taken steps to strengthen the banking sector in Ethiopia, by increasing the capital requirements for banks and introducing new regulations to prevent money laundering and other illegal activities.
- Crackdown on illegal activities: The government has also cracked down on illegal activities related to the black market, by arresting and prosecuting individuals who engage in such activities.
Conclusion
The black market for foreign currency in Ethiopia is a complex issue that has several consequences for the economy and the people. While the demand for US Dollars is likely to remain high, the government's efforts to curb the black market are a step in the right direction. It is important for Ethiopians to have confidence in their local currency and to work towards building a stable and robust economy.