To strengthen Ethiopia’s financial resilience and further enhance economic ties with China—the country’s leading trade partner—the National Bank of Ethiopia (NBE) has unveiled a new initiative aimed at significantly increasing its foreign exchange reserves of the Chinese Yuan (RMB).
This announcement was made at the conclusion of a high-level bilateral meeting between the Governor of the National Bank of Ethiopia, Eyob Tekalign, and the Governor of the People’s Bank of China (PBOC), Pan Gongsheng.
During the discussion, Governor Eyob Tekalign provided detailed information regarding Ethiopia’s ongoing debt restructuring process under the G20 Common Framework.
The Governor added that the country’s Gross Domestic Product (GDP) growth prospects are promising and highlighted the successes achieved in rebuilding foreign exchange reserves.
He specifically explained to his Chinese counterpart that the measures taken by the government to control inflation are yielding results.
Both parties expressed a strong interest in establishing bilateral currency swap lines and trade finance facilities to streamline commercial activities.
Governor Eyob noted that Ethiopia has a significant opportunity to increase its Renminbi (RMB) reserves by utilizing revenue generated from Ethiopian Airlines and other key export sectors.
It is believed that transitioning to a Renminbi-based trade settlement system will not only create a more favorable environment for Chinese companies operating in Ethiopia but also contribute significantly to the flow of new Foreign Direct Investment (FDI) into the country.
The governors of the two central banks discussed extensively the modernization of cross-border money transfers by integrating the countries’ payment infrastructures.
Pan Gongsheng expressed readiness to support Ethiopian financial institutions in participating in China’s Cross-Border Interbank Payment System (CIPS) and to expand China UnionPay services in Ethiopia.
This is expected to greatly simplify retail and commercial payments between the two nations.
