The pound sterling is now being traded between 101 and 109 Ethiopian birr, surpassing the 100 birr mark for the first time following the liberalization of Ethiopia's foreign currency regime.
The birr has depreciated rapidly, losing as much as 46 percent of its value since it was allowed to float freely on the foreign exchange market four days ago on Monday.
In the official market across banks, the U.S. dollar is now trading between 89 and 94 birr. Meanwhile, the parallel market rate remains unchanged, hovering around 112 to 115 birr.
The move to a flexible exchange rate policy is seen as a crucial step for Ethiopia to stabilize its economy and boost exports. It replaces the previous fixed exchange rate system.
Officials say the liberalization of the currency will have significant implications for Ethiopia's trade and economic relations, as the country seeks to attract more foreign investment and improve the competitiveness of its exports.