Borkena
Toronto – The National Bank of Ethiopia announces the amount of US currency available for auction in the fourth quarter of the fiscal year.
It has confirmed that a total of US$200 million is ready for the auction.
It stated that the intention is to ease the demand for forex in the country and facilitate trade activity.
However, the entire amount is not auctioned at once. NBE is first making $100 million available in June this year. Auction for the remaining amount is scheduled for July this year.
The ruling Prosperity Party introduced a market based forex regime in July 2024 as part of the macro-economic reform which was allegedly dictated by the IMF as a condition for arranging an Extended Credit Facility (ECF).
The Ethiopian currency lost about 150 percent of its value against the U.S. dollar since then. It was stated that ending the Fixed Forex regime in favor of a Market based one will improve the foreign currency reserve in the country and promote export trade.
However, businesses in the country continue to face a shortage of foreign currency for their export trade and other related activities. The National Bank of Ethiopia continues to make foreign currency available for commercial banks in the country – stated owned ones or otherwise.
Meanwhile, the IMF is reportedly giving four additional conditions to the Ethiopian government as part of ongoing deal for the Extended Credit Facility accessibility. One of the conditions is for the government to make market-based forex exchanges entirely free.
The National Bank of Ethiopia has been introducing a series of regulatory measures on grounds of ensuring “transparency.” This week, it lifted one of its restrictions. Non-intervention in the forex market rate and removal of subsidies are the new conditions that the ruling party has to meet to continue receiving loans from the IMF. The other conditional is for tightening revenue collection from domestic sources.
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