Ethiopia will introduce a one-year treasury bill and begin weekly auctions in December, the government said in a letter to the International Monetary Fund.

The Horn of Africa nation is planning the sales “to refine our liquidity management capability,” according to the letter, which was signed by Finance Minister Sufian Ahmed and central bank Governor Teklewold Atnafu.

Treasury bill auctions are held sporadically and the notes are sold in durations of 28, 91 and 182 days. State-owned commercial banks are the main buyers of the notes, which had an average weighted yield of 0.778 percent in the last three months of 2009, the latest period of data available, according to the National Bank of Ethiopia’s website.

In 2008, the National Bank of Ethiopia raised reserve requirements for commercial banks in an effort to reduce the amount of money in circulation and quell inflation, which peaked at 64.2 percent in July of that year. The rate declined to 10.6 percent last month, according to the Central Statistics Agency.

The country is also targeting economic growth of 11 percent in 2010-11, though the government said it is making a “conservative assumption” of 8.5 percent growth, the IMF letter said.

Africa’s largest coffee producer is aiming for a budget deficit of 6.5 percent of gross domestic product during the same period, according to the statement.

Ethiopia devalued its currency, the birr, 16.5 percent against the U.S. dollar in September in an effort to boost exports and reduce persistent trade deficits.

To contact the reporter on this story: Jason McLure in Accra at jmclure@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin asguazzin@bloomberg.net.