Ethiopia's birr has recorded the third weakest performance among global currencies tracked by Bloomberg in 2025, trailing only the Argentine peso and the Turkish lira.
Ethiopia's birr has depreciated by more than 15 percent against the US dollar in 2025, marking it as one of the world's worst-performing currencies according to Bloomberg. This decline underscores ongoing pressures linked to the country's debt restructuring initiatives. The currency's future stability hinges on advancements in overhauling external debt to rebuild investor confidence.
"Our view is one of gradual further depreciation, but slower than the recent spike," said Giulia Filocca, an analyst at S&P Global, in an interview with Bloomberg. She emphasized that progress in debt restructuring serves as a vital indicator for drawing investment and bolstering the birr.
Ethiopia aims to finalize its debt overhaul under the G20 Common Framework by mid-2026. The government has secured a memorandum of understanding with the Official Creditor Committee, which includes China and France, to restructure approximately USD 3.5 billion in loans, as reported by Bloomberg. These efforts are expected to enhance investor trust and help stabilize the currency amid persistent economic challenges.
