The National Bank of Ethiopia (NBE), the regulatory authority for the financial industry, has issued a warning to financial institutions and businesses involved in illicit activities related to the foreign exchange market. NBE supervisors have conducted on-site investigations into the foreign currency operations and management of every bank.
Recent macroeconomic reforms have enabled the country to increase its foreign exchange reserves over the last quarter of the year, facilitating the repatriation of profits by international corporations and airlines.
Significant changes were implemented as part of the macroeconomic reform initiated on July 29. These changes included the establishment of a free foreign exchange market and modifications to how the banking sector manages foreign exchange. Notably, citizens are now allowed to open foreign exchange accounts, and new forex bureaus have been established.
NBE Governor Mamo Esmelealem Mihretu reported that the reform has yielded positive and encouraging outcomes in its initial quarter. In an interview with Fana TV, he highlighted several new statistics and developments since the reform’s inception.
For the first time in the nation’s history, the balance of payments recorded a surplus. “The balance of payments showed a USD 573 million surplus, compared to a USD 1.2 billion deficit the previous year,” he stated.
Mamo noted that the government has launched various initiatives aimed at achieving significant results from the new macroeconomic reform. He pointed out that prior to the reform, the gap between the official exchange rate and the parallel market was nearly double. Currently, since the reform began, the difference between the official and black market rates has been between three and five percent, with the overall exchange rate difference now being less than ten percent.
“Since the start of the reform, the exchange rate has fluctuated, but we understand the reasons behind these changes,” the governor explained. He expressed optimism that the gap between the official and parallel markets will narrow and eventually converge.
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