China’s economic influence in Africa has been growing and Ethiopia has been one of the countries that benefited from the former’s economic presence.
Now Ethiopia and China are poised to take their economic relation to the next level as agreement has been reached between the two countries for currency swap.
Ahmed Shide, Ethiopia’s Minister for Finance, revealed this in an interview with the state media.
However, details of the amount of currency swap is undisclosed at this time.
What is indicated is that the National Banks of China and Ethiopia are instructed to work on it. Timeline for finalization is unspecified too.
Chinese financial service providers will be operating in Ethiopia as part of the arrangement for the currency swap, according to Ahmed Shide.
Ethiopia has been struggling with hard currency shortages in recent years.
In July this year, Ethiopia signed a currency swap agreement with the United Arab Emirates amounting to U.S. $817 million which is believed to ease the reserve shortage for U.S. dollars.
There is speculation that the currency swap arrangement with China could be much higher. Currently, China is the largest source of Foreign Direct Investment to Ethiopia and the largest trading partner.
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