FORTUNE+ VIDEO SPONSORED CONTENTS ADVERTORIALS FORTUNE AUDIO Fortune Careers New TRADE AFRICA New

Fortune Logo

There is a bank branch and representative in every nook and cranny in Addis Abeba these days, the latter of which accost any adult they can find to open an account. As another fiscal year faded away, executives of banks feel their efforts have paid off. They are in a jolly mood seeing the total stock of deposits in their safes grow to 1.3 trillion Br, well over double the federal government’s budget for the new fiscal year and a 25pc jump from the previous year.


The state-giant Commercial Bank of Ethiopia (CBE) accounts for over half of the total, with 140 billion Br deposits made last year. Awash Bank, a leader among private banks, mobilised another 33.8 billion Br, crossing 100 billion Br in aggregate deposit for the first time. No less impressive was the Bank of Abyssinia, which almost doubled its deposits.


Such performances were attributable to the demonetisation of the Birr in September 2020. The direct impacts of this were over 15 million bank accounts opened. The amount of money in circulation outside banks fell to 64.6 billion Br from almost double this value before the demonitisation.


The tricky part was keeping the money from circulating back out of banks – which it did, rising to 108.3 billion Br by the end of the second quarter of the fiscal year. Inflationary pressure in the economy, standing at 24.5pc last month and the relentless loss of ground by the Birr against major international currencies, gives little incentive for the public to keep cash with the banks. At an average savings rate of eight percent, a real interest rate of negative 16.5pc to depositors, it is a hard pitch.

Cash holding limits imposed by the authorities have not helped. Designed to disincentivise cash hoarding, individuals are limited to withdrawing a maximum of half a million Birr and businesses to a million Birr a month. Authorities at the central bank are optimistic, nonetheless. They believe the deployment of a national ID system, on the drawing board for over a decade, will streamline and improve the effectiveness of restrictions against hoarding. Individuals, in the meantime, keep opening accounts with as many banks as they want.


You can read the full story    here    




PUBLISHED ON Jul 18,2021 [ VOL 22 , NO 1107]

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.



Related Posts

Editors' Pick

Agenda

Rising Costs, Inflation Threaten Insurance Industry

Aug 18 , 2024 . By AKSAH ITALO

Although predictable Yonas Zerihun's job in the ride-hailing service is not immune to...

Fortune News

Electric Vehicle Push Leaves Investors in the Lurch

Jul 13 , 2024 . By AKSAH ITALO

Investors who rely on tractors, trucks, and field vehicles for commuting, transportin...

Fortune News

Study Reveals Higher Education Quality Crisis, Calls for Reform

Jul 13 , 2024 . By MUNIR SHEMSU

The cracks in Ethiopia's higher education system were laid bare during a synthesis re...

Fortune News

Authority Bets on Price Adjustment Manual to Tackle Construction Delays

Jul 13 , 2024 . By AKSAH ITALO

Construction authorities have unveiled a price adjustment implementation manual for s...

Commentaries

Flower Exports Contested Despite UKs Tariff Break, as Rivals Thrive

When the United Kingdom (UK) exited the European Union (EU), it introduced tariffs on...

Climate Action Essential Rise Above Politics

This year's United Nations Climate Change Conference (COP29) in Azerbaijan's capital...

Fineline

Leaders of the National . . .

Leaders of the National Election Board are in a charm offensive mood, of a sort. Last week, they organised a rare tour for members of the me...

When the country’s most. . .

When the country's most senior diplomats and envoys return back to their posts after two-week debriefings, they leave behind a point or two...

Editorial

Bound by Debt, Government's Costly Love Affair with State Bloat

Nov 16 , 2024

In the realm of public finance, balance sheets speak louder than rhetoric. In such do...

Policy Bargain in Franco Valuta a Double-Edged Sword in the Forex Debacle

Nov 9 , 2024

Ethiopia's foreign exchange debacle resembles a tangled web of contradictions and con...

Addis Abeba Withering as Noise, Air Pollutions Choke the 'New Flower'

Nov 2 , 2024

Addis Abeba, fondly dubbed a 'New Flower,' is wilting under the weight of unchecked u...

Mercato Inferno Lays Bare Ethiopia's Vulnerabilities to Disasters

Oct 26 , 2024

When flames devoured parts of Mercato, residents watched helplessly as decades of toi...

Gallery

Parliament Approves New Cabinet Members

Oct 6 , 2021

Parliament Approves New Cabinet, Incorporates Opposition Leaders Lawmakers have approved today the nominations of 22 ministers, including three opposition leaders. Two MPs have voted against, while 12 abstained...

2020 in Posterity

Jan 5 , 2021

TIGRAY VOTES DESPITE "NULL & VOID" THREAT

Sep 9 , 2020

IN-PICTURE: LAUREATE'S RECEPTION  

Dec 14 , 2019

PM Abiy Ahmed (PhD) at a Gala Dinner Called for the Awarding of the Félix Houphouët-Boigny Peace Prize

May 6 , 2019

Faces, Voices of Addis Abeba

Apr 26 , 2019

Sunday With Eden

Finding My Body Back, A Year Later

For many women, becoming a mother is a transformative experience that reshapes our priorities, self-perception, and connection to our bodies...

Mud-slinging Supermarkets Time for a Wash-up

At least four days a week, my family and I visit supermarkets in the capital to buy groceries. We frequen...

Life Matters

Human Face of Public Service

There are certain promises we make to ourselves—things we swear never to do again. I had made such a promise about taking the city bus. An...

Spinning Hope of Digital Services

Digital services have become integral to our daily lives, offering unparalleled convenience and efficiency. From mobile banking to online sh...

Back
WhatsApp
Telegram
Email