Currency Volatility due to Floating Birr and the Economic Impacts of a Fluctuating Birr 1. Inflation: Fluctuating Birr increases import costs, leading to higher consumer prices. 2. Investment Uncertainty: Investors hesitate due to unpredictability, reducing foreign direct investment. 3. Trade Imbalances: Weak Birr boosts exports but makes imports costly, worsening the trade deficit. 4. Debt Servicing: Depreciation raises the cost of repaying foreign debt. 5. Economic Instability: Businesses struggle with financial planning, lowering economic confidence and stability.