Ethiopia's National Bank has announced that it is implementing a new monetary policy that will double the statutory reserve requirement, from 5 to 10 percent, effective September 11, 2021, the first day of the Ethiopian new year.
Fikadu Digafe, the National Bank's vice governor, also remarked that that banks will be required to transfer 50 percent of their foreign exchange holdings to the national bank, versus a 30 percent requirement previously. Moreover, the amount of money that banks borrow from the national bank to meet reserve requirements will also bew raised to 16 percent from 13 percent.
The new monetary policy aims to regulate the supply and circulation of money in the economy, it has been learned.
Sources: FBC, Bloomberg
