The New Ethiopian Monetary System

THE end of World War II left the monetary systems of the belligerent and occupied countries in a chaotic condition which will necessitate programs of reconstruction and reform if currency difficulties are not to continue to handicap foreign trade. The outstanding difficulties are the inflation which prevails in many of these countries and the fact that the official rates of exchange frequently overvalue the national currency. The first nation to undertake a far-reaching program of postwar currency reform is Ethiopia. Her monetary system, ever since the Italian invasion of I935, has been disorganized. Two steps have recently been taken to improve it: the first was the organization of the State Bank of Ethiopia in August, I942, and the second was the monetary reform, "Currency and Legal Tender Proclamation," No. 76, of I945, and Legal Notice No. 75, of I945, published in the Ethiopian official gazette, Negarit Gazeta (Addis Ababa), Vol. IV, No. 9 (May 29, I945). The new monetary reform embodies some principles which are modern and not as yet widely employed and which have been designed to fit Ethiopia's currency to the requirements of the International Monetary Fund.