Chamber Flaunts Forex Turnaround, Liquidity Issues Hover


Chamber Flaunts Forex Turnaround, Liquidity Issues Hover

The National Bank of Ethiopia (NBE) reported a significant increase in the dollar reserves of commercial banks, from a deficit of 465 million dollars to a surplus of 600 million dollars between the first four months of the fiscal year—July to October. Habtamu Workneh, director of External Economic Analysis and International Relations Directorate at NBE, made the statement during a panel discussion at the Addis Chamber annual members day event held at the Intercontinental Hotel on Guinea Conakry Street on last year. He accentuated that the macroeconomic reforms have created substantial opportunities for the banking sector, noting that the price variation for the dollar in the parallel market has reduced from 97pc in July to 7.8pc by November 27. Several sectors have shown growth, he added, with exports increasing by 110pc and remittances by 25pc. Before the July reform, the Central Bank had been selling 50,000 dollars to commercial banks every day to stabilize the forex market. Post-reform, interbank forex transactions surged to 30 million dollars on November 15 and 22. Independent foreign bureaus purchased 774,027 dollars and sold 574,023 dollars between October 2 and November 25. NBE has authorized 12 bureaus, with five currently active. Habtamu explained that these bureaus higher buying and selling rates, based on cash transactions, are standard practice in neighboring countries. Another presenter at the Chamber’s member’s day event was Tewodros Hailu, director of the Bank Transformation Directorate at Awash Bank. He acknowledged the opportunities presented by the reform but pointed out challenges such as losses due to Birr's depreciation against foreign currencies, particularly for banks with significant foreign currency liabilities. He noted that imports fell from 1.5 billion dollars in August 2023 to 1.2 billion dollars in August 2024 due to banking uncertainty and liquidity issues among importers. Tewodros recommended allowing banks to utilize additional transaction instruments like forward foreign exchange mechanisms to mitigate foreign exchange risks, increasing advance permission limits without guarantees, and easing some payment system requirements. He also emphasized the need to enhance the skills of employees involved in international trade and boost capital to compete in a liberalized market.

[ssba-buttons]

Radar

Revenue Drive Intensifies Following 900 Billion Br Milestone

The Minister of Revenue announced plans to collect 1.28 trillion Br in the upcoming fiscal year. This announcement was made during a discussion forum organised by the Ministry of Revenue (MoR) and the Customs Commission, which included senior leaders, employees, and relevant stakeholders. The event, themed "We will achieve our mission through coordinated leadership and active participation of employees," served as the platform for this important announcement. According to the ministry, they s...


Radar

Parliament Endorses Electoral Law Change Tying Party Support to Member Contributions

Federal legislators have ratified a contentious amendment to the Ethiopian Electoral, Political Parties' Registration, and Elections Code of Conduct Proclamation, revising the criteria political parties must meet to access government funding. The revised proclamation requires political parties to secure at least 20pc of their income from membership contributions in order to qualify for government grants. The clause passed with a majority vote in parliament, with two votes against and four abs...


Radar

City Unveils Major School Expansion Across 11 Districts

Addis Abeba City Administration has launched 150 education projects valued at over 5.2 billion Br ahead of the 2026 academic year. Spread across the capital's 11 districts, the rollout includes 14 newly built schools and upgrades to 64 existing facilities, adding 1,655 classrooms alongside ICT labs, libraries, and sports fields. City officials say the investment is part of efforts to improve access and quality of education, with infrastructure designed to accommodate students with disabilitie...