(3 minutes read)
· The National Bank of Ethiopia (NBE) allowed local banks to borrow from foreign banks. NBE is the financial sector regulatory body of Ethiopia.
· The decision followed the chronic foreign currency shortage the country has been facing for many years
· Some of the businesses houses also brought to the notice of the government the severe foreign exchange crisis and how it affected their operations
The National Bank of Ethiopia (NBE) allowed local banks to borrow from foreign banks. NBE is the financial sector regulatory body of Ethiopia.
The decision followed the chronic foreign currency shortage the country has been facing for many years. The regulator was working on various options to address the problems. Some of the businesses houses also brought to the notice of the government the severe foreign exchange crisis and how it affected their operations. Yinager Dessie (PhD), Governor of National Bank of Ethiopia opined that the move would ease the companies and others to streamline their production processes.
Banks in Ethiopia were not allowed to borrow money outside the country. Also, the stipulation is that all banks, financial institutions and insurance companies are to be owned by the natives. Importantly, a few months ago, the government allowed Ethiopians with other country passports to invest in the country. The country also has allowed the microfinance companies to upgrade themselves s banks bringing a lot of flexibility in the financial regime of the country.
