It normally implies an overvalued domestic currency, resulting in demand for foreign currency that cannot be met. Parallel exchange rates arise when the official exchange rate doesn’t bring the demand and supply of foreign currency into balance. The COVID shock has sent the number of countries with parallel exchange rates to a twenty-year high, with politicians often disagreeing with international institutions on what to do about it. At the black-market rate, it’s half that.” During the rest of my stay, it became clear that exchanging money on the black market, although illegal, was pervasive. It was on a sun-filled December afternoon that a friend corrected me when I converted the cost of our meal back into dollars: “That’s using the official exchange rate. Colloquially known as ‘diaspora season’, it runs into January, where it meets the traditional wedding season. A combination of domestic and international holidays, and the particularly fine weather compared to the shivering northern hemisphere, makes it a popular time to visit. A sideways look at economics 500g of beef shekla tibs: 450 birr 4 beers: 150 birr Total: 600 birr At official exchange rate: $11 US At parallel exchange rate: $6 US The restaurants of Addis Ababa fill up at the end of each year, with conversations switching between American-accented Amharic and English.
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