Ethiopia will enjoy $4.9-billion in relief from debt repayments when it completes its current restructuring exercise, State Finance Minister Eyob Tekalign said on Friday.

The East African country is putting its long-delayed debt overhaul back on track after securing a new International Monetary Fund financing programme.

"We will sign and finalise with each individual (creditor) country over the course of the next few months," Eyob told Reuters, referring to the savings.

Total external debt stood at $28.38-billion in March this year, data from the finance ministry showed.

Eyob was expounding on remarks made by Prime Minister Abiy Ahmed late on Thursday to explain recent economic reforms to the public via a televised event.

Abiy said the new exercise would include savings of $200-million from the restructuring of its $1-billion Eurobond.

Abiy defended this week's switch to a market-determined foreign exchange rate, saying it aimed to close the gap between the official and black market rates and did not amount to a devaluation of the currency.

The central bank allowed the birr to float freely on Monday, fulfilling a key condition for securing financial support from the International Monetary Fund and other creditors, and for putting the nation's long-delayed debt restructuring back on track.

The birr has since then lost 31.5% against the dollar, to trade at 83.94 per greenback, the country's biggest lender, Commercial Bank of Ethiopia, said on Friday, and some economic analysts and commentators have voiced concern that inflation could surge.

"Saying Ethiopia has devalued its currency is wrong," Abiy said late on Thursday in a televised briefing on the new policy.

"There were two markets. One is 100 and the other is 50. So when the gap between the two became wide, it brought many dangers. So what we said, (the two) should be unified," he said

While lifting foreign exchange trading restrictions helped Ethiopia clinch the IMF deal and funding from other creditors including the World Bank, concern about the policy's inflationary impact on low-income households has led at least two local governments to crack down on shops raising prices.

The government and its creditors say the liberalisation will help the private sector make a bigger contribution to the economy and boost long-term growth.