No decline in foreign exchange reserve: NBE

Addis Ababa, May 4, 2017 (FBC) – No decline has been observed in foreign exchange reserve during the past nine months, said the National Bank of Ethiopia (NBE).

Presenting its nine-month performance report to the Budget and Finance Affairs Standing Committee of the House of People’s Representative, the bank said the country has foreign exchange reserve that is enough for more than two months.

Teklewolde Atnafu, Governor of the Bank, in his report indicated the measures taken in the past nine months to restrict inflation to a single digit and to make the financial continued in a healthy and profitable system.

In the reported period, the bank issued a weekly treasury auction sale to avert the impact of money borrowed by the government on inflation. Accordingly, the inflation was restricted to 8.5 %, he indicated.

Despite a plan to raise the nation’s foreign exchange reserve to a 2. 4 months import coverage; it stood at 2.3 months, showing a 0.1 percent decline due to inequity between import-export trades, the Governor stated.

According to Teklewolde, Ethiopia earned only 2 billion US dollars from export in the past nine months but spent 11.5 billion to import goods, he said. The revenue obtained from export trade covered only 17 percent of the expenditure.

In spite of a decline in income from export trade, the revenue secured from remittance contributed for the nation’s foreign exchange reserve. The country obtained 2.4 billion US dollars in remittance in the stated period.

The bank was able to supply sufficient foreign exchange for priority projects. It provided more than half of the 11.5 billion US dollars spending for investors, he said.

The sector has experienced healthy financial systems, he said, adding the 18 commercial banks existed in the country managed to raise their accessibility by 30.6 percent via their 4,127 branches and sub-branches.

They also managed to increase their clients to 23.21 million from 18.48 million and their deposit to 529.6 billion birr. They also provided 110.3 billion birr new loan during the past nine months, he noted.

According to the Governor, the loan provided by the banks in the reported period surpassed by 17 percent compared to the previous year. The banks also raised their capital to 49 billion birr.

The report further said micro financial institutions are also at strong financial positions. They collected 20.2 billion birr in saving and provided 26.7 billion birr loan for 4.6 million clients. Their capital also hit at 9.3 billion birr.

In general, the financial sector has continued in health and profitable ways, the report indicated.