Ethiopia’s forex parallel market continues to experience significant volatility, with the rate soaring to 150 ETB per USD, a sharp increase from the 130 ETB per USD recorded just two weeks ago. This fluctuation underscores the challenges of aligning the official and parallel exchange rates, despite ongoing efforts by the government and commercial banks to stabilize the market.
As part of a broader economic policy reform agreed with the International Monetary Fund (IMF), the liberalization of the forex market was intended to close the gap between the official and parallel markets. The shift to a floating exchange rate was also intended to enhance market transparency, increase liquidity, and reduce reliance on informal trading. However, although the forex reserve has improved, the rise in parallel market prices underscores the ongoing challenge of balancing the supply and demand for foreign exchange.
Commercial banks have intensified efforts to attract remittances, a crucial source of foreign exchange for the country. One prominent initiative is the “CashGo” mobile application, developed by EagleLion, which allows Ethiopians living abroad to send money back home quickly and securely. The app is supported by major Ethiopian banks, including the Bank of Abyssinia, Commercial Bank of Ethiopia (CBE), and Dashen Bank. While CashGo is a key part of the push to channel remittances through formal banking channels, the growth in remittance inflows, rising by 24 percent over the past three months, can be attributed to a broader set of efforts by both the government and commercial banks to promote formal remittance systems.
No Comment Found.