Source: International Monetary Fund – IMF (video statements)
Transforming Ethiopia’s economic model towards private sector-led development required building a financial sector in which market forces, rather than administrative directives, play a greater role. The IMF supported the authorities in designing reforms that lay the groundwork for deeper progress. Through capacity development work, we helped define a clear plan to relaunch the domestic debt market by establishing a credible instrument, denominated in birr, Ethiopian currency, and moving away from past administrative practices, with the aim of restoring bank demand and gradually broadening the investor base. In parallel, capacity development efforts supported the FX and monetary policy reform agenda. These included the revision of FX regulations, introduction of market-based foreign exchange operations through auctions and a new monetary policy framework, improvements in liquidity forecasting, an assessment of National Bank of Ethiopia’s balance-sheet, and the establishment of a collateral framework. Capacity development in areas such as banking regulation, supervision, and crisis management tools and close coordination with the World Bank who supported governance and state-owned bank reforms has also been critical.