Birr To Continue Gradual Slide

The Ethiopian birr is trading at about ETB16.742/US$, as the currency continues to slide gradually after a sharp devaluation in September 2010. The currency's value is managed by the National Bank of Ethiopia (NBE), which claims 'exchange rate stability' as one of its key directives. Furthermore, inflation has picked up sharply since the September devaluation, exacerbated by rising commodity prices worldwide. As a result, we don't anticipate another NBE-induced devaluation in the short-term, and we expect the birr to trade at about its current level.

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