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Why has the gap between the parallel (black market) and official exchange rates widened and persisted after Ethiopia changed its financial system?
Furthermore, what does it mean when it is said that Ethiopia's financial system reform is at risk if the country's persistent security problems and related issues are not resolved?
Moreover, how does the National Bank of Ethiopia perceive the warning from the International Monetary Fund (IMF) that the failure to resolve Ethiopia's security issues, along with the widening gap between the parallel and official exchange rates, could reverse the macroeconomic reforms?
The Governor of the Bank, Mamo Mihretu, stated that the IMF report indicates that the Ethiopian economy is growing rapidly, inflation is rising, foreign exchange inflows are increasing, and is on the right path of development.
However, he suggested that while this is the case, it is undeniable that the gap between the officially set exchange rate and the parallel market is widening again, for which prompt corrections are needed, according to financial experts.
Dr. Abdulmenan Mohammed has worked in England and Ethiopia in banking, finance, accounting, and auditing for the past 25 years.
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