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National Bank of Ethiopia Considering 200 Birr Notes

Inflation in EthiopiaAugust 20, 2011 - The National Bank of Ethiopia (NBE) has commissioned a study to move to 200 birr notes, abandoning the 100 birr notes as the highest legal tender in Ethiopia, according to the Reporter. In the face of the runaway inflation in the economy, which spiked 39.2 percent last month, a currency with 100 birr note as its highest nomination could not sustain the volume of transaction in the economy, according to the report.

On the other hand, some of the banks that operate Automatic Teller Machines (ATMs) have been requesting the central bank, the only commissioned government entity to decide on currency denomination, to consider a currency of higher value. According to these banks, thus far, the maximum amount that an ATM customer can withdraw at a time is limited to below 4,000 birr for lack of larger notes. Sources say that NBE is also studying the matter at the moment.

Nevertheless, some of the economic professionals The Reporter talked to say that it is not only about facilitating banking operation. According to them, the volume of transaction in the economy is expanding year-on-year, while the purchasing power of the birr in the local market. “In terms of its value against other currencies, the birr is slipping consistently.”

Source: Reporter


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