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Ethiopia lifts ban on borrowing from foreign lenders

The National Bank of Ethiopia (NBE) has lifted a ban it imposed on commercial banks to borrow funds from international financial institutions.The Governor of NBE Yinager Dessie on Saturday to the local media that the lifting intends to ease the crisis of loan-able funds faced by local banks and minimize existing foreign currency shortages.

The governor said the directive will also help the commercial banks meet the demands of credit by local companies.

According to the governor, NBE will supervise and make sure that local banks do not abuse the new directive including issuing excessive borrowing.

Remittances, foreign aid, loans and Foreign Direct Investment (FDI) have remained to be the country’s only sources of foreign currencies.

The bank recently issued a directive limiting the amount of cash that individuals and companies can keep at home.

Accordingly, individuals and banks cannot store more than 42.867 out of banks. 

The directive intends to help the nation enjoy better cash circulation and deter money laundering.

He said anyone who is found keeping or carrying more than the stated amount of cash will face punishment.

Published on 28.04.2020

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