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Addis Ababa — Following the implementation of comprehensive macroeconomic reform across various sectors, significant strides have been made in Ethiopia’s foreign exchange sector, according to Minister of Finance Ahmed Shide.
The minister provided an update on the progress of Ethiopia’s comprehensive macroeconomic reform policy implementation, fiscal policy reform and other related issues.
In a briefing to the media, Ahmed outlined the government’s efforts to stabilize the economy and address key challenges, including inflation, foreign exchange shortages, and public debt.
One of the sectors that underwent macroeconomic reforms is the foreign economy sector, he recalled.
Although there were many major reforms in this sector, allowing the foreign exchange rate to be determined by the market, improving the bank’s foreign exchange management guidelines and granting licenses to non-bank foreign exchange offices were the main reform measures.
Following the comprehensive macroeconomic reform various positive results have been recorded, he said, noting that the official foreign exchange rate is being implemented in the market in a stable manner.
Although some countries have seen large fluctuations in foreign exchange rates, but in our country, the daily index of foreign exchange rates is moving in a stable manner, the minister said, adding that this is the result of implementing a strict monetary policy.
Additionally, the gap between the official and parallel foreign exchange rates has been narrowed significantly, the minister stated.
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Before the reform, the difference between official and parallel foreign exchange was 95.7 percent he pointed out, adding that the government has been able to bring it closer following the administrative and policy measures taken.
However, some volatility remains, with the exchange rate between September and October showing moderate fluctuations. Despite this, both the banking sector and the government are poised to introduce further adjustments to strengthen the exchange rate.
Moreover, the minister elaborated that in the first four months of the fiscal year, all the commercial banks recorded a 3.3 billion USD in foreign currency earnings, showing an increase of 13.5 percent compared to the same period last year.
One of the primary drivers of this growth is the notable improvement in remittances, which have seen a 69 percent increase in September compared to the same period last year, he added.
The National Bank of Ethiopia has enhanced its foreign exchange reserves. The bank’s foreign exchange reserve has increased by 152 percent since the end of the fiscal year.
On the other hand, Ahmed elaborated that Ethiopia’s economy is expected to grow by 8.4 percent in the 2017 Ethiopia’s fiscal year, with the macroeconomic reform playing a key role in driving this growth.
He pointed out that the positive results recorded in key sectors such as agriculture, tourism, manufacturing, construction, mining, and the digital sector over the past three months provide strong evidence that the forecasted growth is achievable.
Moreover, he revealed that the economic development of Ethiopia and a comprehensive macroeconomic reform is believed to create economic integration between the countries of the region.
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