Commercial Bank of Ethiopia CBE this week said that the Ethiopian importers are not making full use of the foreign currency allocated to them. The importers used only 28% of foreign currency allocated after the introduction of macro economic reforms.
The CBE announced that it allocated more than $282 million of foreign currency to importers following the macroeconomic reforms and the average usage so far is only 28%.
Importers, on the other hand, blame slow processing by the bank. They say that banks are taking too much time releasing the foreign currency.
Ethiopian private banks including the commercial bank of Ethiopia, in the last 3 months, bought foreign currency more than sold it. Yesterday, banks released new foreign exchange rates after the National Bank of Ethiopia told them to ensure that the difference between the buying and selling price of foreign currency must not exceed 2%. Ethiopian importers have long been buying foreign currencies in black market where the process takes almost no time.
The Ethiopian government introduced macro economic reforms in July this year to kill the black market. The government tried to narrow down difference between the price of dollar in black and open markets. Though the difference, which was more than 100%, has largely decreased, the black market is still flourishing.
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