The National Bank of Ethiopia (NBE) has officially launched an online platform for the country's new Interbank Money Market, it announced on Thursday.
NBE said the interbank money market will operate exclusively on the Ethiopian Securities Exchange trading platform, which has regulatory approval. This centralized marketplace is expected to streamline transactions and ensure equal access for commercial banks to vital financial resources.
The platform will allow commercial banks to trade short-term liquidity with each other, enabling more efficient management of reserves and stronger financial stability. It marks a significant step forward in the NBE's ongoing transition towards an interest rate-based monetary policy framework.
Participating banks will trade within an interest rate corridor set by the NBE, centered around the National Bank Rate. This corridor establishes NBR+3% as the upper limit and NBR-3% as the lower limit for interbank transaction interest rates, ensuring trades occur within the corridor and predictable range, the central bank said.
When operational, the platform is set to facilitate both overnight and one-week loans between commercial banks. Compliance with rules on transparency, fairness and ethics will be overseen by the NBE's dedicated directive and code of conduct for the market.
Access will be restricted to approved commercial banks only, maintaining integrity. And the NBE has called for full cooperation among participants to realize the market's potential in strengthening Ethiopia's financial system and its control of monetary policy objectives.
