Life Matters | Dec 19,2021
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]
Life Matters | Dec 19,2021
Films Review | Mar 28,2020
Viewpoints | Oct 02,2021
Radar | Sep 18,2021
Covid-19 | Mar 06,2021
Fortune News | Feb 26,2022
Radar | Dec 19,2021
Agenda | Sep 26,2021
Life Matters | Feb 22,2020
Fortune News | Feb 26,2022
Dec 24 , 2022
Biniam Mikru heads the department of cabinet affairs under Mayor Adanech Abiebie. But...
Jul 2 , 2022 . By RUTH TAYE
On a rainy afternoon last week, a coffee processing facility in the capital's Akaki-Qality District was abuzz with activ...
Nov 27 , 2021
Against my will, I have witnessed the most terrible defeat of reason and the most sa...
Nov 13 , 2021
Plans and reality do not always gel. They rarely do in a fast-moving world. Every act...
Feb 4 , 2023
Rene Lefort is a French journalist with a keen interest in Ethiopia, spanning over ha...
Jan 28 , 2023
It is not common to see an appointment for a senior federal government office stir de...
Jan 21 , 2023
Eyob Tekalign, state minister for Finance, took to social media platforms last week t...
Jan 14 , 2023
The longing for normalcy and a semblance of individual and collective security in Eth...
Loading your updates...