Ethiopia's central bank governor has praised the "very positive start" of recent currency reforms, as the bank announced plans to inject 175 million dollars to support vital fuel imports.
"Ethiopia's foreign exchange reform has shown a very positive start in just a short period of two months, with a significant drop in the parallel market premium...and a growing availability of foreign exchange," National Bank of Ethiopia (NBE) Governor Mamo Mihretu said in a statement on Thursday.
The governor noted the parallel premium had fallen from near 100 percent to below five percent, with strong supply responses seen in exports, remittances and availability of foreign currency for businesses. FX reserves at NBE and commercial banks have also risen to record levels, according to the central bank.
Mamo indicated further currency auctions may also be used to maintain stability during this adjustment period. "FX allocations for this specific purpose will be conducted at periodic intervals over the course of the year depending on market conditions," he said.