Birr (Currency)

The birr is the official currency of Ethiopia. One birr is subdivided into 100 cents. The currency is issued and regulated by the National Bank of Ethiopia, which is responsible for printing banknotes, minting coins, and managing monetary policy.

The word "birr" originally means "silver" or solid money in Ethiopian languages (Amharic and Tigrinya). The name derives from the time when valuable currency was made from silver. Before this, the country used the term "Ethiopian dollar" in English usage, but the name birr was later formally adopted.

History

Before colonization and the early twentieth century, Ethiopia used silver currency and other forms of money such as salt bars (amole) and foreign coins. During the reign of Emperor Menelik II, national coins began to be minted. During Italian occupation (1936–1941), the lira and occupation currencies were used. After liberation, the national currency was reorganized, and the Ethiopian dollar was used. In the 1970s, following a change in government system, the name birr was formally reintroduced.

Forms of Currency

The birr is issued as banknotes and coins. The notes are inscribed in Amharic and English and feature images relating to agriculture, livestock, culture, and historical buildings of the country. Cent coins are typically used for everyday commerce. In 2020, the National Bank of Ethiopia released new banknotes intended to reduce counterfeit currency and informal money.

Exchange Rate Policy

For a long time, the international value of the birr was managed under a tightly controlled system, which created a gap between the official and black market rates. The central bank frequently carried out devaluations to encourage exports and reduce pressure on foreign currency reserves. In 2024, Ethiopia took a major step to allow the birr's value to be market-based, part of economic reform agreements and cooperation with international financial institutions.

Use and Economy

The birr is used within Ethiopia and is also traded across borders with neighboring countries. High inflation in recent years has affected the purchasing power of the currency, particularly the price of food. The use of mobile payment and digital banking is increasing in major cities.