Connect with us

Hi, what are you looking for?

Economy

IMF raises Ethiopia’s international reserves target after first review

NAIROBI (Reuters) – The International Monetary Fund has raised Ethiopia’s net international reserves target to facilitate payments of upcoming hard currency bills, the Fund said.

The East African nation secured a $3.4 billion, four-year financing program from the IMF in July after carrying out a series of reforms including floating its birr currency. It is also in the midst of a fresh push to put its debt restructuring back on track.

“An increase in near-term target is warranted by Ethiopia’s vulnerabilities and heightened uncertainty around outlook,” the IMF said in a report published late on Monday.

Lower-than-expected volumes of hard currency sales by the central bank through auctions and higher gold exports contributed to an over-performance of the net international reserves target for August, the IMF said.

The net international reserves stood at $1.3 billion in mid-August, more than double the target of $630 million, the Fund said.

It raised the end-June 2025 target by $300 million to $400 million, to help create a buffer for the country to settle maturing letters of credit for fuel imports issued before reforms started.

The flotation of the birr currency resulted in the convergence of the official and the black market rates, the IMF said, but market activities had picked up at a slower pace than expected, leading to persistent unmet demand for dollars.

Ethiopia plans to reach a deal with bilateral creditors by year-end, the Fund said, followed by a deal with its Eurobond investors “as soon as is feasible” after that.

Bondholders have rejected the size of the proposed reduction in the principal amount, known as a haircut, indicated at 18% in a recent investor presentation, saying the government was ignoring the fact that Ethiopia faces a liquidity issue, not an insolvency one.

“The authorities are making good faith efforts to agree terms with Eurobond holders,” the IMF said.

This post appeared first on investing.com






    You May Also Like

    Editor's Pick

    Sen. JD Vance (R-Ohio) and Minnesota Gov. Tim Walz (D) will face off Tuesday night at a CBS News vice-presidential debate in New York....

    Latest News

    A North Korean defector who escaped to the South more than a decade ago was detained after attempting to cross back into North Korea...

    Economy

    A U.N. human rights group confirmed Hamas’ leader in Lebanon, who was recently killed by Israeli strikes, was their employee.  Fateh Sherif was killed...

    Investing

    Astron (ASX:ATR) and Energy Fuels (TSX:EFR,NYSEAMERICAN:UUUU) have completed the establishment of a joint venture to advance the Australia-based Donald rare earths and mineral sands...

    Disclaimer: balanceandcharge.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2024 balanceandcharge.com