August 18, 2020
Ethiopia introduced a limit to the amount of cash that individuals or companies can put aside outside of banks or financial institutions.
According to a report by the state media, Ethiopian News Agency, the new limit to the amount of cash stash is 1.5 million Ethiopian Birr which is about US$ 42,000.
It is Yinager Dessie, governor of the National Bank of Ethiopia, who announced it on Tuesday in the capital Addis Ababa.
The new measure is expected to help ease dire foreign exchange shortage in the country; the Governor is cited as saying. It is unclear as to how the government is going to implement the policy other than by limiting the amount of cash withdrawal. The problem with that approach is that tens of billions of birr is said to be in the hands of individuals and businesses outside the baking system.
The government has been attempting to discourage black market forex exchange in the country, especially in the capital Addis Ababa.
A report by local media this week said that one US dollar is exchanging up to 45 Ethiopian birr, and one British Pound Sterling is exchanging for 55 Ethiopian birr.
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In Eritrea the limit is I think $300 per month. How does one engage in business? And even ecpensfes if you have large family. On the other hand there must be several millionaires with $42K in cash. How do they arrive at this numbers?