Ethiopia Seals Currency Swap Deal with China

Ethiopia and China have agreed to use their respective currencies for bilateral trade, a move aimed at enhancing economic cooperation and addressing foreign exchange challenges. The announcement was made by Ethiopian Finance Minister Ahmed Shide following the recent Forum on China-Africa Cooperation (FOCAC) meeting in Beijing. He revealed that the central banks of both countries are finalizing the details of the currency swap agreement, similar to the one Ethiopia signed with the United Arab Emirates (UAE) in July. The agreement is expected to facilitate trade and investment between Ethiopia and China, easing foreign exchange shortages and supporting the country's broader macroeconomic reform agenda. Ahmed also noted that additional grants have been secured from China to bolster Ethiopia's development efforts. China has been a major trading partner of Ethiopia. In 2022, Ethiopian imports from China amounted to 2.92 billion dollars, while exports totalled 175 million dollars. Chinese Foreign Direct Investment (FDI) in Ethiopia during the first ten months of the current fiscal year has reached nearly half of the country's total FDI target of three billion dollars. At the FOCAC meeting, China pledged to provide 51 billion dollars in support to Africa and create one million jobs.