The National Bank of Ethiopia has injected $175 million into the economy to mitigate a looming foreign currency crisis related to upcoming fuel payments. This move aims to safeguard the economic gains from IMF-backed financial reforms. The funds will assist the Ethiopian Petroleum Supply Enterprise in meeting its foreign exchange requirements for fuel imports. The country’s recent foreign exchange reforms have led to reduced parallel market premiums and increased forex reserves. Prime Minister Abiy Ahmed is spearheading efforts to attract foreign investments, with companies like Safaricom and Kenyan banks showing interest. The flexible exchange rate regime, implemented in July, gives commercial banks authority to set forex prices. The IMF had approved a $2.9 billion credit facility for Ethiopia, contingent on economic reforms. However, challenges like the conflict in Tigray and defaults on financial obligations have posed obstacles. Despite these hurdles, the NBE’s intervention seeks to stabilize the economy and bolster foreign exchange reserves for future sustainability.
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Ethiopia Central Bank Releases $175m to Prevent Forex Crisis
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