The birr (ብር) is the unit of currency in Ethiopia. Before 1976, dollar was the official English translation of birr. Today, it is officially birr in English as well.
In 1931, the Emperor of Ethiopia, Haile Selassie I, formally requested that the international community use the name Ethiopia (as it had already been known internally for at least 1,600 years) instead of Abyssinia, and the issuing Bank of Abyssinia also became the Bank of Ethiopia. Thus, the pre-1931 currency could be considered the Abyssinian birr and the post-1931 currency the Ethiopian birr, although it was the same country and the same currency before and after.
186 billion birr were in circulation in 2008 ($14.7 billion or €9.97 billion).
In the 18th and 19th centuries, Maria Theresa thalers and blocks of salt called "amole tchew" (አሞሌ ) served as currency in Ethiopia. The thaler was known locally as the Birr (literally meaning "silver" in Ge'ez and Amharic) or ታላሪ taleri. The Maria Theresa thaler was officially adopted as the standard coin in 1855, although the Indian rupee and the Mexican dollar were also used in foreign trade.
The talari (thaler, dollar, birr) became the standard unit on 9 February 1893 and 200,000 dollars were produced at the Paris Mint in 1894 for Menelik II. The talari, equivalent to the Maria Theresa thaler, was divided into 20 ghersh (also guerche or gersh, the name coming from the Ottoman Empire's qirsh) or 40 bessa (a small copper coin).
A new Ethiopian coinage appeared about 1903. The new silver birr maintained the same weight and fineness as the old, but there was now a quarter-birr and a silver ghersh, the latter 1/16 the weight of the birr. The money of account now became 1 birr' = 16 ghersh = 32 bessa''.
The Bank of Abyssinia was established in 1905 by Emperor Menelik and the European banking group behind the National Bank of Egypt; the bank was officially inaugurated by Menelik on 15 February 1906. The Ethiopian coinage gained acceptance only gradually, and Bank of Abyssinia imported Maria Theresa thalers. By the time World War I broke out, the bank was still importing about 1,200,000 of these coins annually. Bank of Abyssinia put banknotes into circulation in 1915. These notes were denominated birr in Amharic and thaler in English. They were used by merchants and by foreigners but were not initially accepted generally. However, Note circulation increased considerably after 1925.
Emperor Haile Selassie bought out the Bank of Abyssinia in 1931 for £235,000 in order to make it a purely Ethiopian institution. It was reorganized as Bank of Ethiopia. At the same time, the currency was decimalized and token nickel and copper coins were introduced, the birr becoming equal to 100 metonnyas (often written matonas). The text on the bank's notes appeared in Amharic and French.
By the mid-1930s circulation consisted chiefly of Maria Theresa and Menelik talari.
Not long after the Italian occupation and the attempted transformation of Ethiopia into Italian East Africa, the Italian lira was introduced (15 July 1936) and Ethiopian banknotes were withdrawn from circulation at 3 lire per talar (birr). In an effort to increase the use of Italian paper money, the exchange rate for silver coin (Maria Theresa thalers) was raised to 4.50 lire, then to 5.00, and eventually, in stages, to 13.50. Still, many people kept their Ethiopian coins and banknotes.