The monetary policy action introduced by the National Bank of Ethiopia (NBE) early this fiscal year surges banks’ reserve by a fifth as of the end of last year.
It is to be recalled that after reviewing the economic and financial sector developments in late August 2021, the Board of Directors of NBE passed several decisions.
Atop of the decisions made was the revision and increase of the reserve requirement of financial institutions by double from the long-established five percent. At the time, the board gave a transition period of three months starting from September 1 2021 in order to meet the new reserve requirement on birr and foreign currency deposit liabilities.
Under the 7th amendment of setting the reserve requirement Directive No.SBB/80/2021 that was issued late August reversing the SBB/55/2013 Directive that was issued on March 1, 2013, NBE ordered banks to double their reserves.
On its latest quarterly report for the 2021/22 second quarter, NBE stated that the monetary policy action that was taken by the regulatory body led to a surge in the deposit liability of central bank. In the stated period, NBE’s deposit liabilities shot up by 25.3 percent annually and 25.8 percent compared with the first quarter of the same fiscal year.
The deposit liabilities have capped to highs of 190 billion birr up from 151.7 billion birr of the same quarter of last fiscal year.
From the stated amount, 145.2 billion birr was taken up by financial institutions that are mainly banks. According to the quarterly report, NBE’s liability for banks has also increased by almost 21 percent standing at 145.1 billion birr from 129 billion birr a year ago.
The decision of the NBE board to double the reserve requirements was mainly to curb the growing inflation.
The country first introduced the reserve requirement through Directive No. SBB/14/96 which became effective on January 1, 1996 with a 10 percent requirement.
The highest reserve requirement was 15 percent under the 4th amendment of Directive No. SBB/45/2008, which was effective on April 7, 2008 and lasted until January 1, 2012 which then reduce to 10 percent.
The 2008 and the years that followed are notoriously remembered as the years that the country recorded its highest inflation ever. It was recorded that in the first quarter of 2008 the general inflation stood at 60 percent, while the food inflation was at 81 percent.
In related development, NBE on its second quarter economic review showed that the current account receipts increased by over ten percent meanwhile public transfers declined sharply.
It said that current account receipts stood at USD 4.6 billion and showed a 10.3 percent annual increase due to higher merchandise export (26.9 percent), service proceeds (27.4 percent) and private transfers (14.6 percent) despite sharp decline in public transfers (53.1 percent).
Similarly, total current payments increased 27.5 percent to USD 6.0 billion on account of strong growth in merchandise import (31.0 percent), services payment (17.5 percent) and public transfers (139.1 percent), in contrast with a 20.6 percent slowdown in private transfers.
As a result, current account deficit (including official transfers) widened to USD 1.4 billion from USD 544 million deficit a year earlier.
NBE’s monetary policy pays dividends
First Biodegradable Vape to Launch Worldwide
ALD Group Limited (ALD) will announce at The Global Tobacco & Nicotine Forum (‘GTNF’)’s In Focus event that it is set to launch the first biodegradable vaping product worldwide in mid-2023 – which will also be 90% recyclable (including the packaging, plastic shell, PCBA, mouthpiece and battery).
Currently named the ‘Eco-friendly, Biodegradable Vape Solution’ (EBVS), the new device will take as little as three months to biodegrade, and was created in response to consumer and market demand, as numerous international tobacco customers – with the global scale needed to make vaping more sustainable across the world – have approached ALD with their requests to make e-cigarettes more environmentally friendly.
Founded in 2009 and headquartered in Shenzhen, ALD is a high-tech enterprise specializing and leading in electronic atomization technology research and applications. ALD′s business covers ENDS (Electronic Nicotine Delivery Systems), IMV (Inhaled Medical Vaporizer) and HTPs (Heated Tobacco Products).
The Embassy of Israel fare welled two Ethiopian mothers of two Israeli Soldiers honored and awarded the President’s Medal of Excellence
The Embassy of the State of Israel fair welled two Ethiopian mothers of two outstanding Israeli soldiers to Israel to attend the President’s Medal of Excellence award ceremony given by Isaac Herzog, President of the State of Israel. Nathnael Fantahun, 24 and Abrash Zagia, 23 recipients of this award migrated to Israel and joined the military.
Abrash, the first recipient solider serves as medical secretary at the Medical Services Headquarters, received the Presidential Outstanding Medal along with 119 other soldiers. The soldiers receive this award for their significant service and extraordinary contribution to the Israel Defense Force (IDF) and the State of Israel. In 2018, Abrash immigrated to Israel from Addis Ababa as a lone soldier, her Jewish father died 20 years ago when she was a child and her mother, Alganesh Werku, stayed in Ethiopia.
Nathnael Fantahun is the second recipient is a solider awarded with President’s Medal of Excellence award for his excellent achievement in the military. His mother Emebet Negussie said that this was something that was beyond her expectation and everything still feel surreal.
Election Influencers for Hire: Kenya’s Disinformation Factories
In a nondescript office north of Kenya’s capital Nairobi, social media influencer Ian James Mwai constantly glances at his two mobile phones, wary of missing an opportunity to promote the political party he works for. The 23-year-old is in the vanguard of the growing ranks of influencers feverishly punching keyboards and hoping to tilt the outcome of the country’s high-stakes elections, which are less than 100 days away. The rising dominance of platforms like Twitter and Facebook has opened up a new front in Kenyan politics, with candidates desperate to draw the attention of the country’s 12 million social media users…Demographics are a key factor behind the drive: Kenya’s population is estimated to be 50 million, more than half of them under 35. Six million youngsters will also become eligible to vote this year as they come of age. It has spawned a new industry – packed with online personalities who parrot politicians’ views, create false narratives, deflect criticism and promote viral conspiracies. And they offer clients something invaluable: plausible deniability. “There are so many teams and personnel out there and you cannot control what they put online,” said Mwai. “My team is ethical,” the social media strategist hastily adds, referring to the 70 influencers under his wing. Charging a minimum of 50,000 Kenyan shillings ($430) per day for a trending hashtag on Twitter, their services are in hot demand.
