The Ethiopian Birr (ETB) is the official currency of Ethiopia, a country located in the Horn of Africa.
The current form of the Birr was introduced in 1945, replacing the Ethiopian Thaler, which was used during the Italian occupation.
The National Bank of Ethiopia is responsible for issuing and managing the Ethiopian Birr.
Exchange Rate System
The Ethiopian Birr operates under a managed floating exchange rate system, where its value relative to other currencies is determined by market forces, such as supply and demand.
However, the National Bank of Ethiopia can intervene in the foreign exchange market if necessary to maintain stability or prevent excessive fluctuations.
This system allows the Ethiopian Birr to respond to external shocks and changes in global market conditions while maintaining a certain level of stability.
Subdivisions and Denominations
The Ethiopian Birr is subdivided into 100 smaller units called santim.
Coins are issued in denominations of 1, 5, 10, 25, and 50 santim, as well as 1 Birr.
Banknotes are available in denominations of 1, 5, 10, 50, and 100 Birr.
Economy and Challenges
Ethiopia has one of the fastest-growing economies in Africa, with significant contributions from various sectors, including agriculture, manufacturing, construction, and services.
The country has a large domestic market and has been investing heavily in infrastructure development to promote economic growth.
However, Ethiopia faces various economic challenges, such as high levels of poverty, inflation, unemployment, and income inequality.
Additionally, the country is vulnerable to external shocks, including fluctuations in global commodity prices and climate-related events such as droughts.
Summary
In summary, the Ethiopian Birr is the official currency of Ethiopia and is managed by the National Bank of Ethiopia.
The currency operates under a managed floating exchange rate system, with its value determined by market forces and potential intervention from the National Bank.
The Ethiopian Birr is subdivided into santim and is issued in various banknote and coin denominations.
Ethiopia has a fast-growing economy but faces ongoing challenges related to poverty, inflation, unemployment, and income inequality, as well as vulnerability to external shocks and climate-related events.