The History and Current State of the Ethiopian Birr

The Ethiopian Birr has a rich history that dates back to 1931, when it was introduced as the official currency of Ethiopia.

The birr was pegged to the British pound at a rate of 2.471 birr per pound, a rate that remained in effect until 1976.

This pegging was a result of Ethiopia's colonial past, during which the country was a British protectorate.

The birr was initially divided into 100 subunits called santims, but the use of santims was discontinued in 1976.

Today, the Ethiopian Birr is still widely used in Ethiopia, although the US dollar and other foreign currencies are also accepted in many places.

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The Ethiopian birr has a rich and fascinating history. It was named after the Empress of the Holy Roman Empire, and officially adopted as the national currency in 1855, with the Maria Theresa Thaler serving as the standard coin.

The Maria Theresa Thaler was known locally as the birr or talari, and was divided into 20 ghersh or 40 bessa. The new silver birr, introduced in 1903, maintained the same weight and fineness as the talari, but also included a quarter-birr and a silver ghersh.

The Bank of Abyssinia was established in 1905, and put banknotes into circulation in 1915, denominated in birr in Amharic and thaler in English.

The first birr was introduced in 1855 and served as the standard coin in Ethiopia, also known as the Maria Theresa thaler.

In the 18th and 19th centuries, other currencies like the Indian rupee and the Mexican dollar were also used in foreign trade.

The birr was known locally as the birr or talari, literally 'silver' in Geʽez and Amharic.

The birr was divided into 20 ghersh or 40 bessa, a small copper coin, in 1893.

The Bank of Abyssinia was established in 1905 by Emperor Menelik and the European banking group behind the National Bank of Egypt.

The bank was officially inaugurated by Menelik on 15 February 1906.

The Bank of Abyssinia imported Maria Theresa thalers, with about 1,200,000 coins imported annually by the time World War I broke out.

The bank put banknotes into circulation in 1915, denominated birr in Amharic and thaler in English.

Emperor Haile Selassie bought out the Bank of Abyssinia in 1931 for £235,000 to make it a purely Ethiopian institution.

The currency was decimalized and token nickel and copper coins were introduced at the same time.

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The second birr was reintroduced on 23 July 1945 at a rate of 1 birr per 2 shillings. This marked the beginning of the current birr era.

The birr was pegged to the U.S. dollar at a central rate of 1 birr = US$0.4025, or 2.48447 birr = US$1. This rate was later slightly changed to 2.50 birr = US$1 on 31 December 1963.

The name Ethiopian dollar was used in the English text on the banknotes, although this was not the official name of the currency. It was divided into 100 santims, which were derived from the French centime.

In 1976, the official name of the currency was changed to birr, and it was used in all languages. This marked a significant shift in the country's currency naming convention.

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In 1915, the Bank of Abyssinia started circulating banknotes, denominated in birr in Amharic and thaler in English, which were initially used by merchants and foreigners but not widely accepted.

These banknotes were a significant development in the Ethiopian currency system, marking a shift away from relying on imported coins.

The Bank of Abyssinia continued to import Maria Theresa thalers, about 1,200,000 annually, until the banknotes gained more widespread acceptance.

It's worth noting that it would take another decade for the banknotes to become more widely accepted, with circulation increasing considerably after 1925.

In 1936, the Italian lira was introduced in Ethiopia, replacing the Ethiopian banknotes at a rate of 3 lire for every talari (birr). This change was part of the Italian occupation of Ethiopia.

Many people kept their Ethiopian coins and banknotes, even after the introduction of the Italian lira. This suggests that the Italian occupation was not widely accepted by the local population.

Regular Italian coins and banknotes of Banca d'Italia circulated after 7/15/1936. These notes were issued by the Italian central bank, Banca d'Italia.

Special notes with a red overprint were authorized for Italian East Africa on 9/12/1938. However, it's unclear how widely these notes were used in practice.

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The Ethiopian birr has undergone significant changes in its currency denominations. In 2020, new banknotes of 10, 50, 100, and 200 birrs were introduced.

These new denominations were designed to tackle inflation, with the 200-birr banknote being a high denomination note. The older issues of 10, 50, and 100 birr notes were demonetized in December 2020.

The federal government reported that over 113 billion birrs remain hidden from the banks, which is believed to be contributing to the current instability in Ethiopia. The government spent 3.7 billion birrs to print the new banknotes.

Companies and individuals can only cash up to 1.5 million birrs, and the cash withdrawal from banks should not exceed 100,000 birrs. The old 5-birr notes will remain legal tender but will be replaced with a coin.

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The Ethiopian birr is the national currency of Ethiopia, issued by the National Bank of Ethiopia.

It's worth noting that the Ethiopian birr is subdivided into 100 santims.

The currency code of the Ethiopian birr is ETB, which is used in commerce.

As of August 2021, 1 ETB is equal to approximately USD $0.02.

The proposed birr symbol is based on the Geʽez fidel ብ (bə), with one suggested symbol comprising the bə with two horizontal slashes on the left hand side.

The symbol used in commerce is "Br", which is the standard way to represent the Ethiopian birr in financial transactions.

The Ethiopian birr has a complex history, and its value is managed by the National Bank of Ethiopia, which uses a dirty float system to control its exchange rate.

In 2008 and 2011, Ethiopia faced high inflation rates of 44% and 32%, respectively, which were largely driven by monetary policy. The country's economy is now growing rapidly, with exports consisting of agricultural products and gold.

The birr's value was devalued by 15% in 2017 due to a trade deficit, which led to limited foreign exchange availability. This move was made in response to World Bank recommendations.

The Ethiopian economy has experienced significant growth, with a GDP growth rate of 8.36% in 2019.

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The Ethiopian economy has a complex history, with the National Bank of Ethiopia managing the value of the birr against other currencies using a dirty float system since 1994.

In 2008 and 2011, the country faced high inflation rates of 44% and 32% respectively, which critics attribute to monetary policy.

The economy has been growing rapidly, with exports consisting of agricultural products and gold, making it a non-oil dependent economy as of 2021.

A trade deficit in 2017 led to a 15% devaluation of the birr, which was adjusted to balance potential inflationary pressure.

The country's GDP grew by 8.36% in 2019, according to World Bank data, while inflation was 15.84% over the same period.

The government has faced criticism for not distributing wealth evenly, leading to public protests in 2016 and a state of emergency that lasted nearly a year before being reinstated in February 2018.

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The Ethiopian birr, the national currency of Ethiopia, is issued by the National Bank of Ethiopia and manages its value through a dirty float.

The birr is considered an exotic currency in the foreign exchange market, meaning it's thinly traded.

The first recorded currency was the Maria Theresa thaler, named after the Empress of the Holy Roman Empire.

Here are some key facts about the currencies used in Ethiopia:

The Ethiopian birr has been floating since 2024, following reforms that liberalized the foreign exchange market. This led to a significant decline in the birr's value against the US dollar.

The National Bank of Ethiopia spearheaded this initiative, receiving $13.5 billion from international partners to support the transition. The funding aimed to adopt a flexible exchange rate system.

The birr's value plummeted from 57 birr per US dollar to 106 birr per dollar within a week of floating. This volatility was due to the rapid adjustments of foreign exchange rates by the Commercial Bank of Ethiopia and private banks.

The birr is considered an exotic currency, meaning it is thinly traded and not widely used in global financial transactions. There is limited demand for the birr outside of Ethiopia's borders.

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To understand the birr's value, we can use the USD/ETB exchange rate. For example, if the rate is 29.65, it costs 29.65 birr to buy one US dollar. If the rate increases to 33, the birr has lost value against the US dollar.

Here's a simple example of how to calculate the ETB/USD rate: divide one by the USD/ETB rate. In this case, dividing one by 29.65 gives us 0.0337, meaning it costs a little more than $0.03 to buy one birr.

The birr's value has been steadily decreasing against the US dollar since 2014, indicating USD strength against the birr and/or birr weakness relative to the USD.

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