Ethiopia's Economic Reforms Clear Way for IMF Disbursement

The International Monetary Fund approved Ethiopia's $3.4 billion lending program review, enabling a $340.7 million disbursement. The program was secured following Ethiopian reforms, including currency flotation and debt restructuring. Investors rejected an 18% Eurobond writedown as IMF accelerates program reviews to monitor foreign exchange impacts.

The International Monetary Fund (IMF) has given the green light to the first review of Ethiopia's $3.4 billion lending program. This approval facilitates the disbursement of $340.7 million to Ethiopia, marking a significant step in the country's economic reforms.

Ethiopia has been working towards this four-year financing agreement with the IMF since July. Key reforms include floating the birr currency and progressing with debt restructuring. Last month, a staff-level agreement was reached, leading to the recent board consideration and approval.

However, challenges remain, especially concerning Ethiopia's $1 billion Eurobond. Investors have rebuffed the proposed 18% write-down. The IMF is maintaining a rigorous review schedule to monitor the ongoing impact of these reforms, with a special focus on foreign exchange dynamics.

(With inputs from agencies.)