IMF Staff Country Reports

This paper presents Ethiopia’s First Review under the Extended Credit Facility (ECF) Arrangement, Request for Modification of Performance Criteria, and Financing Assurances Review. The Ethiopian authorities have shown strong commitment to their homegrown economic reform program. Implementation of ECF-supported reforms is advancing well. The transition to a market-determined exchange rate has been progressing well with a significant narrowing of the spread between the parallel and official market rate and no signs of significant inflationary pressures, albeit the supply of foreign exchange to the market has picked up more slowly than anticipated with some unmet demand persisting. Program performance has been in line with program commitments and all quantitative performance criteria were met, with an overperformance in the net international reserves target. Four out of five structural benchmarks (SBs) were met. The SB on the Emergency Liquidity Assistance framework was missed but is expected to be implemented in October, after incorporating feedback from IMF staff.