FX Reform Initiative by NBE Receives $13.5 Billion Financial Injection

Ethiopia is making significant changes to its foreign exchange policies to liberalize the market and enhance economic stability. The National Bank of Ethiopia (NBE) leads this FX reform initiative and receives substantial financial commitments from international partners.

The NBE announced $13.5 billion in coordinated financing from multilateral lenders and creditors. This funding will help ease the transition to a more flexible foreign exchange system. External partners will provide $10.7 billion, marking the largest commitment of its kind to Ethiopia. This support will cover the costs of adopting a floating exchange rate and implementing necessary reforms. This funding includes contributions from the IMF and World Bank, as well as support from other creditors.

 An additional $2.8 billion will come from bilateral sources, including bank deposits and currency swap lines. This financing is vital for maintaining liquidity in the market. The NBE FX reform initiative aims to create a more competitive and transparent foreign exchange market.

Governor Mamo Mihretu stated that the World Bank, IFC, and other multilateral institutions will announce more financial support soon. This ongoing assistance is crucial for ensuring the successful implementation of these reforms and stabilizing the economy during the transition.

Although the success of these reforms will depend on effective implementation and continued support from international partners.

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