Inside Birr's devaluation impact on FX, investment flows & economic stability

Ethiopia's recent decision to float its currency, the birr, resulting in a 30 per cent drop in value has sent shockwaves through the economic landscape of the country. The move by the Central Bank to secure International Monetary Fund (IMF) support and embark on a long-delayed debt restructuring has been met with mixed reactions and anticipation. To delve deeper into the potential repercussions of this pivotal decision on Ethiopia's trade balance and overall economic stability, CNBC Africa's Tabitha Muthoni sat down with Bernard Laurendeau, CEO of Arifpay. Laurendeau commended the Ethiopian government's bold reform efforts, emphasizing the country's significant economic growth in recent years. Despite facing challenges, including the impact of the global pandemic and internal crises, Ethiopia has emerged as an economic powerhouse in the region. The CEO highlighted the importance of reframing the narrative around the devaluation, stressing that the ultimate goal is to support the country's growing economy. He expressed optimism about a forthcoming phase of market stability, which would pave the way for increased entrepreneurship and innovation. Laurendeau also touched upon the potential impact of relaxing currency restrictions for travelers and opening up Ethiopia's stock market to foreign investors on the country's foreign exchange reserves and trade balance.