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Ethiopia Sees New Benchmark Rate, Floating Currency After 2023

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Rate Floating Currency After 2023Samuel Gebre

Ethiopia plans to start setting a central bank benchmark interest rate and to introduce a floating exchange rate, according to National Bank of Ethiopia Governor Yinager Dessie. The central bank’s plan forms part of reforms Prime Minister Abiy Ahmed’s administration is rolling out to boost investment and continue strong economic growth. Already one of Africa’s fastest growing, Ethiopia’s economy

“In the next three years, we will work toward a market-driven interest rate that can truly be used as a monetary-policy instrument,” Yinager said Monday on state-affiliated Fana Broadcasting Corp. “We do not have a functioning signal mechanism.”

The government is in the process of privatizing some state-owned enterprises, including selling part of monopoly Ethio Telecom and Ethiopian Sugar Corp.’s assets. Some companies will have their debt restructured, with the government taking over part of the liabilities, Finance Minister Ahmed Shide said during the televised discussion, without giving details. The Horn of Africa nation is also look