The government of Ethiopia on September 14, 2020, has introduced a new birr, a unit of Ethiopian currency, with additional security features and other forms of identifications just after the celebration of the Ethiopian new year.
Prime Minister Abiy Ahmed revealed, on his Facebook post, that the existing 10, 50, and 100 birr notes will completely be replaced and the first 200 birr notes will join the market.
This currency change aims to collect the money that is being circulated informally outside of the conventional financial institutions.
The replacement also has the intention of curbing corruption, contraband, and solving currency shortages in the financial institutions of the county.
The National Bank of Ethiopia (NBE) recently had limited the amount of cash to be deposited outside of banks and the amount of cash being withdrawn by individuals and businesses.
According to the data from the Ethiopian Bankers Association, more than 115 billion birr is circulating outside of financial institutions in the country in 2020 which was 63 billion birr in 2016. As a solution, the association had been proposing money replacement.
The process of converting the money started on Monday, September 14, and a command post composed of members of the National Intelligence and the Federal Police oversees the process working closely with the community.
Yinager Dessie, governor of the NBE has told state media EBC that both notes will be used side by side until the old note is completely replaced with the new one within three months.
Besides introducing the new birr the prime minister has made an announcement that the first-ever official symbol for birr will be revealed soon.