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

Fortune Logo

Parliament Grants Greater Autonomy to National Bank

Dec 17 , 2024

The Parliament has approved a new proclamation that strengthens the National Bank of Ethiopia's (NBE) autonomy, granting it independence over monetary policy and foreign exchange management. The proclamation allows the central bank to exercise its powers and functions and make monetary policy without external interference, limiting the executive branch's influence over the Bank. However, despite its greater statutory independence, the central bank remains accountable to the Prime Minister.

A key provision of the proclamation caps the government's access to central bank financing. The law  limits the federal government’s access to credit to temporary overdrafts of no more than 15pc of the average annual domestic revenue from the previous three fiscal years.. These overdrafts must be repaid within 12 months and cannot be rolled over.

The legislation also establishes a financial stability committee responsible for managing bailouts during financial crises.

The new law aligns with the NBE's three-year strategic plan, which the Bank expects will help ensure monetary and fiscal stability. It replaces the 2008 National Bank Establishment Proclamation and redefines the central bank’s powers and responsibilities.

One update in the new law includes raising the minimum paid-up capital of the NBE from 500 million Br to 10 billion Br, a move designed to strengthen the bank’s financial capacity.

While the proclamation increases the central bank’s autonomy, the Prime Minister still retains an influence. The Prime Minister appoints the NBE governor, vice governor, board chairperson, and six additional board members, reinforcing the executive branch’s oversight of the Bank.



Related Posts

Share This Post
Linkedin
Google+


Most read

Latest News

Editor's pick

Commentaries

Tight Monetary Policies Risk Stifling Economic Growth, Undermining Business Confidence

In a bid to curb inflation, which is still at double digits, and preserve financial s...

Leads Lethal Legacy, a Poison We Choose to Ignore

Lead is everywhere, often hiding in plain sight, in the water we drink, the air we br...

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

Breaking the Chains to Protect the Vulnerable During Painful Reforms

Jan 18 , 2025

Adanech Abebie, the mayor of Addis Abeba, addressed last week a warm-up session for h...

Banks Struggle to Lend as Branches Bloom, Coffers Wither

A severe cash shortage squeezes the economy, and the deposit-to-loan ratio has slumpe...

The Year That Falls Short in Lofty Ambitions, Brittle Realities

Jan 4 , 2025

Time seldom passes without prompting reflection, and the dawn of 2025 should nudge Et...

The Bureaucrats Turn to Masters of Misrule, Architects of Uncertainty

Dec 28 , 2024

On a flight between Juba and Addis Abeba, Stefan Dercon, a professor of economic poli...

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

Acts of Kindness Create Lasting Legacies

A couple of weeks ago, I attended a wedding that felt like more than a union of two p...

Pride Overpowers Empathy, Civility

Last weekend, my family and I set out for a simple visit to relatives in the Old Airport neighbourhood. What should have been a routine trip...

Life Matters

Media Coverage of Africa Skews Towards Negativity

My recent search for news about Africa revealed a frustrating trend: an overwhelming focus on conflict, d...

The Burden of Beauty, Pressure for Perfection

Ethiopia's kaleidoscope of skin tones reflects its rich diversity. Complexion varies not just between ind...