Ethiopia's Currency Falls To Lowest Rate Against Dollar

14 July, 2009

ADDIS ABABA, Ethiopia (AFP) - Ethiopia's currency, the birr, fell to its lowest ever rate Monday against the dollar, losing nearly 10% to exchange at 12.445.

The National Bank of Ethiopia, the Horn of Africa nation's central finance institution, devalued the birr in the face of dwindling forex reserves.

In January a dollar was worth 10.57 birrs.

The foreign exchange shortage is mainly due to a reduction in coffee exports, from which more than 60% of the country's total foreign exchange revenue is generated.

Ethiopia's hard currency reserve stood at $800 million last month, against a target of more than $1 billion.

In 2007-2008 Ethiopia exported 171,000 metric tons of Arabica coffee - almost 15% of world production - and earned more than $500 million, according to official figures.

Authorities have issued a grim forecast this year however, with figures expected to be as low as slightly more than $300 million due to a slump in demand as a result of the global economic slowdown.