December 11, 2024

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NBE suspended the exchange licenses of 12 banks

NBE Suspends Foreign Exchange Licenses of 12 Banks

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The National Bank of Ethiopia NBE suspended the foreign exchange licenses of 12 banks for under invoicing. Abebayew Durefa, the deputy head of the Forex Monitoring and Reserve Management Directorate of NBE, stated, “We have suspended the foreign exchange licenses of these twelve banks because they were using under-invoiced customs exchange rates.”

Reportedly, with the under invoicing these banks were selling dollars to only their connections. Moreover these banks were adding the profit of 20 Birr in both buying and selling of dollars.

Furthermore, some banks added an extra condition of profit of 1M Birr in account. You can buy the dollar from these banks if you have 1M Birr profit in your account and this amount of 1M Birr should be in your account from last four months.

Abebayew highlighted the importance of timely interventions to maintain financial stability and ensure the effective implementation of the new exchange rate system, confirming that the monitoring system is already operational.

As part of this initiative, Abebayew announced disciplinary actions against these banks.

The National Bank of Ethiopia (NBE) launched a new system to monitor commercial banks daily as part of its broader financial reform efforts, which include adopting a free-floating exchange rate system. 

Abebayew Durefa called this transition a “bold decision.” Officials believe the free-floating system will stabilize the market as it will balance supply and demand automatically.

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