Applauding the recent move by the National Bank of Ethiopia (NBE) to distribute 100 million USD to 16 private banks, Board Member of a private bank said has reservations about its fairness and urged the government to implement better solutions to the shortage of hard currency.
United Bank Board Member who opted for anonymity told The Ethiopian Herald that the distribution of the dollar to private banks to ease hard currency shortages is insignificant compared with the foreign currency crunch that the bank is facing.
“The distribution of dollars to private banks this time around is a good initiative, yet it is a common practice,” the Board Member said adding, “but 100 million USD is not enough to ease the shortage.”
NBE on its part noted the distribution has been in consideration of their capitals, adding it is an effort declaration hoping to ease the shortage in foreign currency.
The currency shortage is challenging the country’s foreign exchange activities as the country’s exports are limited in terms of size, diversity, quality, and standard. The country’s exports couldn’t earn the desired amount of foreign currency, the Board Member further stated.
The lasting solution for the currency shortage is increasing the export items. The Board Member also added large scale import substitution activities have to be also pursued.
Asfaw Alemu, Chief Executive Officer (CEO) of Dashen Bank, whose bank received a 15.1 million share from the total amount, described the new system as encouraging, reported FBC.
Board Chair of Ethiopian Bankers Association and President of Debub Global Bank, Addisu Haba, for his part, hailed the new system and added: “it shows that a new approach is coming to the banking sector.” Addisu also underscored the need to find a lasting solution to the problem.
The Ethiopian Herald