Ethiopia’s currency falls to lowest rate against dollar

ADDIS ABABA - Ethiopia’s currency, the birr, fell to its lowest ever rate on Monday against the dollar, losing nearly 10 percent to exchange at 12.445. The National Bank of Ethiopia, the Horn of Africa nation’s central finance institution, devalued the birr in the face of dwindling forex reserves. In January a dollar was worth 10.57 birrs. The foreign exchange shortage is mainly due to a reduction in coffee exports, from which more than 60% of the country’s total foreign exchange revenue is generated. Ethiopia’s hard currency reserve stood at $800 million last month, against a target of more than one billion dollars. Addis Ababa exported 171 000 tons of arabica coffee - almost 15% of the world production - in 2007-2008, and earned more than $500 million, according to official figures. Authorities have issued a grim forecast this year however, with figures expected to be as low as slightly more than $300 million due to a slump in demand as a result of the global economic slowdown.