Before Yinager Dessie (PhD), no governor had been accused of monetary indiscipline, but it is different this time. Monetary economists of the Friedman's school strongly believe that inflation is always and anywhere about money supply. What has happened in Ethiopia’s economy appears to offer them an ideal case to test their theories.
There is too much cash in the economy chasing few goods and services. The central bank pumped over 300 billion Br in new money into the economy in the previous year. Compared to seven years ago, it is an eye-watering amount when the broad money supply was 298 billion Br. In one year, the central bank created as much money as was in the entire economy until 2013/14, bringing the broad money supply to 1.3 trillion Br.
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