IMF Approves $261 Million Disbursement to Ethiopia Following Successful Economic Review

The International Monetary Fund has cleared a $261 million disbursement to Ethiopia, marking a pivotal step in the country’s ongoing economic stabilization efforts. This tranche follows a comprehensive review of Ethiopia’s macroeconomic policies and structural reforms, including fiscal consolidation and improvements in public financial management. The approval reflects the IMF’s confidence in Ethiopia’s commitment to maintaining economic stability amid persistent external pressures. The disbursement will directly enhance Ethiopia’s foreign exchange reserves, which have remained under strain due to high import costs and external debt servicing. With the ETB=X exchange rate showing signs of stabilization in recent months, the injection of hard currency is expected to improve liquidity and support the central bank’s ability to manage exchange rate volatility. This funding is part of a larger $4.2 billion Extended Credit Facility (ECF) arrangement approved in 2023, under which Ethiopia has already received several tranches. The $261 million payout brings the total disbursements to approximately $3.7 billion since the program’s inception, underscoring growing international support for Ethiopia’s reform trajectory. Market participants in the EMEA region are closely watching the development, as it may trigger renewed interest in Ethiopian government bonds and equities. Investors in emerging market debt and currencies are likely to reassess Ethiopia’s risk-reward profile, particularly in the context of broader African economic recovery narratives. The move could also influence capital flows into other frontier markets in Sub-Saharan Africa.