The Ethiopian Birr (ETB) is the national currency of the Federal Democratic Republic of Ethiopia. The Ethiopian Birr has a rich history that dates back centuries, having been an integral part of Ethiopia’s trade, economy, and overall growth as a nation. As the official currency of the Ethiopian people, the Birr has played an important role in shaping both the country’s economic stability and international presence. Over its history, the Birr has undergone several changes in value and design, reflecting Ethiopia’s political and economic developments.
Today, more than 100 million people in Ethiopia rely on the Birr for their daily transactions, making it a crucial component of the country’s economy and financial system. Moreover, the Birr is an important symbol of Ethiopia’s cultural heritage and economic progress. This article delves into the history of the Ethiopian Birr and its evolution over time, including the recent currency reforms.
History
The Ethiopian Birr underwent various changes over various time periods. It was first introduced as the standard unit in 1893 and has since undergone several devaluations and reformations. The most recent currency reform was in 2020, which included the introduction of new banknotes.
Origin
The Ethiopian Birr has its origins in the 18th century, when blocks of salt known as “amole chew” and Maria Theresa thalers were used as money in Ethiopia. Maria Theresa Thaler, also known as the Mint of Austria, was a silver coin that was widely used in international trade during the time. It served as the currency for Ethiopia during the 18th and 19th centuries. However, the the talari, or Melenik dollar eventually replaced Maria Theresa thaler. The talari was then adopted as the standard unit on February 9, 1893, with about 200,000 dollars produced for Menelik II at the Paris Mint in 1894.
Modern Ethiopian Birr
The modern Ethiopian Birr was officially adopted in 1894, under Emperor Menelik II. It replaced the previous currency, the Maria Theresa Thaler, which was in use for over a century. Menelik II founded the Bank of Abyssinia in 1905 with help from a European banking organization. It then began issuing banknotes in 1915. In 1931, Ethiopian Emperor Haile Selassie purchased the Bank of Abyssinia for £235,000, creating the National Bank of Ethiopia. The bank’s notes had text on them in Amharic, French, and English.
The Ethiopian Birr didn’t stop its transformation here. It has undergone several changes over the years, each differing from regime to regime, with varying degrees of success and impact on the economy. Some of these changes include the introduction of new banknotes, currency devaluations, and restrictions on foreign currency exchange.
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The Current Ethiopian Birr
In September 2020 Ethiopian Prime Minister Abiy Ahmed introduced new currency notes. While a new 200 Birr note was added to the existing denominations, the 100, 50, and 10 Birr notes were also redesigned with new security features. After its change at the end of the Ethiopian-Eritrean war, this currency change was the most recent.
Value and Currency Exchange Rate
The value of the Ethiopian Birr, like many other international currencies, has been subject to fluctuations, determined by various factors such as political stability, economic events, and regional trade patterns.
The National Bank of Ethiopia has used a dirty float system to control the Birr’s exchange rate against other currencies since 1994. Accordingly, the bank periodically intervenes in foreign exchange markets to alter the value of the Birr if it identifies that it is overvalued or undervalued.
Over the past few decades, Ethiopia has experienced inflation, resulting in a depreciation of the Birr’s value. In response, the Ethiopian government has implemented various monetary policies to stabilize the currency and keep inflation in check. One of the monetary policies implemented is the introduction of a new currency note with enhanced security features.
In terms of value against other currencies, one Birr currently buys 0.019 USD according to Exchange Rates UK Converter’s live rate as of March 25, 2023.
Click HERE to see the live Ethiopian Birr exchange rate.
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