31/07/2026
“Kristalina and I worked hard in 2019 to convince Prime Minister Abiy to end those central banking practices. We were unsuccessful and the devaluations have proceeded inexorably,” Former World Bank President David Malpass notes, pointing out that multiple exchange rates and restricted forex access allowed a few politically favored groups at the expense of the public, with ordinary citizens bearing the brunt through inflation.
“The incentive to devalue was intense because it was so profitable,” the former president recalled in recent policy research working paper.
“The profit from the devaluation accrued to the central bank and a small group of people favored by government officials, while the cost was borne through the inflation tax on the poor,” he noted.
