Radar | Sep 10,2021
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]
Commentaries | May 23,2021
Fortune News | May 28,2022
Radar | Jul 11,2021
Films Review | Nov 23,2019
Radar | Sep 10,2021
Aug 18 , 2024 . By AKSAH ITALO
Although predictable Yonas Zerihun's job in the ride-hailing service is not immune to...
Jul 13 , 2024 . By AKSAH ITALO
Investors who rely on tractors, trucks, and field vehicles for commuting, transportin...
Jul 13 , 2024 . By MUNIR SHEMSU
The cracks in Ethiopia's higher education system were laid bare during a synthesis re...
Jul 13 , 2024 . By AKSAH ITALO
Construction authorities have unveiled a price adjustment implementation manual for s...
Nov 9 , 2024
Ethiopia's foreign exchange debacle resembles a tangled web of contradictions and con...
Nov 2 , 2024
Addis Abeba, fondly dubbed a 'New Flower,' is wilting under the weight of unchecked u...
Oct 26 , 2024
When flames devoured parts of Mercato, residents watched helplessly as decades of toi...
Oct 20 , 2024
Central Bank authorities have unveiled no less than six new guidelines to fine-tune t...
Loading your updates...