Jul 13 , 2024
In a historic move to manage liquidity within the banking system, the National Bank of Ethiopia (NBE) held its first-ever open market operation (OMO) on July 11, 2024. The auction drew notable interest from the financial sector, with 16 bidders submitting nearly 20 billion Br. The central bank accepted the total amount of bids, reflecting the banking industry's robust engagement with this new monetary policy tool. The NBE's foray into OMOs is seen as a strategic measure to control the money supply, stabilise the financial system, and address liquidity imbalances. Analysts have stated the importance of such initiatives in maintaining economic stability, especially in a dynamic and evolving market environment like Ethiopia's. The inaugural auction involved a two-week deposit-taking operation, attracting substantial interest from financial institutions. According to the official announcement, the total amount of bids submitted by participants reached an impressive 19.970 billion Br. This level of engagement displayed the broad spectrum of financial entities eager to participate in the central bank's liquidity management framework. The fixed interest rate for this operation was set at 15pc, providing a competitive return for the participating institutions. The operation's start date coincided with the auction date, and the maturity date was scheduled for July 24, ensuring a two-week duration for the deposits.
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