Saturday, January 7, 2012

National Bank of Ethiopia Cut Reserve Requirement 500bps

The National Bank of Ethiopia cut the minimum deposit reserve ratio by 500 basis points to 10% from 15% previously, the Bank also cut the liquid assets to deposits ratio by the same margin to 20 percent from 25 percent previously.  The move is aimed to encourage banks to lend money, particularly to the export sector.  Ethiopia reported annual consumer price inflation of 39.2% in November. According to IMF statistics Ethiopia saw inflation of 10.5% in 2010, and economic growth of 6.96%, the IMF forecasts growth to average about 8% out to 2015, and inflation 6%.  Ethiopia's currency, the Ethiopian Birr (ETB), weakened about 2% against the US dollar last year, while the USDETB exchange rate last traded around 17.29.


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