News: IMF, Ethiopia reach staff-level agreement on first review of $3.4 billion ECF program
Addis Abeba – The International Monetary Fund (IMF) announced on Friday that it had reached a staff-level agreement with Ethiopian authorities on the first review of the country’s four-year, $3.4 billion Extended Credit Facility (ECF) program.
The IMF confirmed that the agreement is subject to approval by its management and Executive Board in the coming weeks, which would allow Ethiopia to access approximately $345 million in funding.
Alvaro Piris, head of the IMF mission, stated that “Ethiopia’s economic reform program, including the transition to a market-determined exchange rate, is advancing well.” He added that the new exchange rate regime, introduced in late July, has significantly narrowed the gap between the formal and parallel markets, “with little disruption to the broader economy.”
This ECF arrangement, initially approved in July 2024 for a total of $3.4 billion, is part of Ethiopia’s ongoing homegrown economic reforms aimed at improving macroeconomic stability and foreign exchange availability. The IMF noted that the country’s steady implementation of these reforms is key to ensuring sustainable economic growth.
Looking ahead, the IMF highlighted the need for “continued tight monetary policy and the end of monetary financing of government” to help reduce inflation. The organization also emphasized that the government’s temporary fiscal spending package would mitigate the socio-economic impacts of the reforms.
The IMF staff engaged in discussions with key Ethiopian officials, including Minister of Finance Ahmed Shide and National Bank of Ethiopia Governor Mamo Mihretu, as well as representatives from the private sector. AS
