![]() Hawala is a form of informal money transfer outside the banking system whereby Ethiopians in the diaspora remit foreign currency to middlemen, who pay the chosen beneficiary in Ethiopia in local currency at the black market rate. At its peak, in September 2022, US$1 bought nearly 120 ETB on the black market.Īnother common way of diverting foreign currency is through illegal hawala. On the black market, a United States (US) dollar is worth double the official bank rate, which on 20 March 2023 was 53.8 Ethiopian birr (ETB). ![]() The black marketeers use small shops, usually set up for lawful businesses like boutiques, from where they signal to or directly ask passers-by for any foreign exchange. ![]() There are many unregulated foreign currency exchange bureaus in the country, many of which are located in Addis Ababa. The black market limits the inflow and facilitates the outflow of legitimate foreign currency to and from Ethiopia. Over at least the past three years Ethiopia’s foreign currency deficit has led to a thriving black market exchange, fuelling already-problematic illicit financial flows in the country.
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