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· Ethiopia’s National Bank has announced a new monetary policy which seeks to double the statutory reserve requirement, from 5 to 10 percent, effective September 11, 2021
· Banks will be required to transfer 50 percent of their foreign exchange holdings to the national bank, as against a 30 percent requirement previously
Ethiopia’s National Bank has announced a new monetary policy which seeks to double the statutory reserve requirement, from 5 to 10 percent, effective September 11, 2021. That is incidentally the first day of the Ethiopian fiscal year.
Fikadu Digafe, the National Bank’s vice governor, also remarked that banks will be required to transfer 50 percent of their foreign exchange holdings to the national bank, as against a 30 percent requirement previously.
Moreover, the amount of money that banks borrow from the national bank to meet reserve requirements will also be raised to 16 percent. It was 13 percent earlier. The new monetary policy aims to regulate the supply and circulation of money in the economy.
