Keep Up with Addis Insight
Add us to your Google Preferred Sources to see updates first.
Commercial Bank of Ethiopia Allocates Over USD 282 Million in Foreign Exchange After Major Reform
Addis Ababa, Ethiopia — July 22, 2016
Following the National Bank of Ethiopia’s (NBE) overhaul of the foreign exchange management system, the Commercial Bank of Ethiopia (CBE) has announced the distribution of over USD 282 million to various sectors between July 22, 2016, and September 30, 2017.
The foreign exchange reform, aimed at creating a competitive and market-based system, introduced new policies that enable banks to better compete in the market and provide more efficient foreign currency allocation. The reform is expected to boost foreign trade by making the supply of foreign exchange more responsive to demand and increasing banks’ foreign currency income.
Under this new framework, CBE distributed a total of USD 282,459,436.76 across four rounds, benefiting various sectors including pharmaceuticals, manufacturing, import/export businesses, and government institutions.
The allocation breakdown includes:
Medicines and medical supplies: USD 208,290,167.10
Machinery: USD 42,777,753.94
Raw materials and consumer goods: USD 18,153,777.53
Service fees and miscellaneous expenses: USD 13,237,737.99
Despite the sizable allocation, the bank reported that the utilization rate by recipients averaged only 28%, suggesting that businesses are yet to fully capitalize on the available foreign exchange. CBE assured that it will continue to distribute foreign currency regularly to meet the needs of businesses in various sectors, in accordance with the new policy.
The reform is seen as part of a broader effort by Ethiopia’s central bank to enhance the country’s foreign trade competitiveness and modernize the financial system, supporting sustained economic growth.
