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ADDIS ABABA, Ethiopia
Ethiopia demonetized its currency on Monday, but gave people a three-month window to exchange old bank notes.
Prime Minister Abiy Ahmed, who unveiled the new banknotes, said the pass will combat hoarding, counterfeiting, corruption and other evils afflicting the economy. Banks have been asked to start issuing new banknotes immediately.
“It was considered necessary to introduce the changes in our banknotes to save the fractured economy of the country,” said the prime minister in a meeting that included ministers, bank governors and heads of security agencies.
During the three-month window, both new and old banknotes will remain in circulation.
The 100, 50 and 10 denomination banknotes will be canceled after three months, as they have been replaced by new banknotes. Abiy said that the new coin with its better design, security features and paper quality will have more longevity and will end the threat of counterfeiting.
A new 200 denomination money note has also been introduced.
The prime minister said the country has spent 3.7 billion birrs ($ 101.2 million) to print new currency.
In his presentation, the Governor of the National Bank of Ethiopia, Yinager Dessie, said that the newly introduced banknotes will help the country end hoarding, counterfeiting, corruption and other evils.
Ethiopia previously approved instructions that any company or individual can hold cash only up to 1.5 million birrs ($ 41,000). Cash withdrawals from banks also must not exceed 100,000 birrs ($ 2,737).
Prime Minister Abiy said his government has taken numerous steps since coming to power in April 2018 to save the fractured economy.
“We inherited a situation in which the country did not have enough money to make the payments of public officials,” he said, adding that the country had a significant budget deficit and a debt level above sustainable.
He also said that in the last two years, his government has reduced sovereign debt from 35% to 25% of the country’s GDP.
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