The Ethiopian National Bank (NBE) Chief today visited newly established foreign exchange bureaus. The NBE recently authorized private bureaus to buy and sell foreign currency.
Mamo Mehretu, the National Bank Governor, today visited two independent forex bureaus which have started operations in the Bole and National Theater neighborhoods of Addis Ababa. The Governor welcomed the two new entrants and recognized the important role that such foreign exchange bureaus will play in meeting the needs of Ethiopians going overseas for personal or business travel. The NBE chief checked the availability of foreign currency notes at the two bureaus. Both bureaus said foreign currency cash notes are available for travelers upon demand.
The Governor claimed that foreign exchange supply conditions are steadily improving across the banking sector. He urged all banks to continue to entertain customer fx requests and to do so without delays.
In July, the Ethiopian government introduced macro economic reforms in order to get a financial bailout package from the International Monetary Fund and World Bank. The reforms led to the liberalization of foreign exchange market. Private banks were authorized to deal in foreign currency sale and purchase and private foreign exchange bureaus were established.
Liberalizing of FX market led to significant decline in the value of Ethiopian currency birr against US dollar. The national bank of Ethiopia is trying to ensure smooth and steady provision of foreign currency to Ethiopian businessmen, tourists, students etc. But according to a report recently released by the Commercial Bank of Ethiopia, Ethiopian businessmen are only partially buying the foreign currency allocated for them. They seem to be buying dollars more in black market.
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