The History of Currency in Ethiopia

The History of Currency in Ethiopia

Did you know that before Ethiopia had its own currency, people sometimes paid for things with blocks of salt?

Long before the birr existed, a type of salt called Amole Tchew was so valuable that it was used as money in many parts of Ethiopia. Concurrently, another form of currency was becoming increasingly popular: the Maria Theresa thaler, often called the talari. Even though it was originally minted in Austria, Ethiopians stared using the silver coin during the international trade and trusted it so much that it became one of the country's most widely used currencies for decades.

That all began to change in 1893 when Emperor Menelik II decided Ethiopia should have a currency of its own. He introduced the Ethiopian Birr, featuring his portrait on one side and the Lion of Judah on the other. It was a powerful symbol of Ethiopia's independence and sovereignty. Although the birr officially became the nation's currency, people didn't immediately abandon the talari. In fact, many continued using it because it had already earned their trust through years of trade and everyday use.

As Ethiopia entered the 20th century, the country began modernizing its financial system. The Bank of Abyssinia opened in 1905, and by 1915 Ethiopia had introduced its first banknotes denominated in birr. More reforms followed under Emperor Haile Selassie I, who worked to strengthen Ethiopia's control over its banking system. Still, old habits die hard, and silver coins like the talari remained common in markets and daily transactions.

The story took another turn in 1936 when Italy occupied Ethiopia. During the occupation, the Italian lira replaced the birr as the official currency, and Ethiopian banknotes were removed from circulation. But despite these changes, many Ethiopians continued to hold on to the money they knew and trusted.

When Italian control weakened during World War II, Ethiopia entered a transitional period where several different currencies circulated at the same time, including Indian, Egyptian, British, and East African money. By 1942, the East African shilling had become the official legal currency. Yet even then, the Maria Theresa thaler continued to show up in everyday transactions, proving just how deeply rooted it had become in Ethiopian commerce.

Following the return of Emperor Haile Selassie, Ethiopia once again restored its national currency. In 1945, the Bank of Abyssinia, now known as the Bank of Ethiopia, introduced a new series of birr banknotes, marking the beginning of the country's modern monetary system. Over the following decades, new coins were issued, the National Bank of Ethiopia was established, and the country's currency continued to evolve.

The Ethiopian birr we know today began taking shape in the late 20th century. In 1997, Ethiopia introduced redesigned banknotes with updated colors, stronger security features, and a fresh look. Later, a new 1-birr coin also replaced the 1-birr note, making the currency more durable and practical for everyday use.

 

I remember when the 1-birr coin first came out. It was meant to replace the paper note, but for years the two circulated side by side. The coin may have been the future, but the note was what people knew. In a way, it echoed what happened more than a century earlier, when Menelik II introduced the birr and people kept reaching for the silver thaler they already trusted. Ethiopians have always taken their time letting go of the familiar.

I suppose I'm no different. I haven't lived in Ethiopia through the recent currency changes, yet I still catch myself expecting things to look the way I remember them. The 100-birr note, for example, is blue now, but in my mind it will always be green. That's the one I grew up with.

The older I get, the more I notice how quickly time moves. Places change, people change, and even the everyday things we barely register, like the money in our pockets, quietly become something new.

So how do we hold on to the invisible pieces of our childhood, the things we rarely think about but notice the moment they're gone?

 

Back to blog

Leave a comment