Ethiopia signs currency swap agreement with UAE amid forex challenges
Date
7/17/2024 4:04:47 AM
(MENAFN) Ethiopia, grappling with a significant foreign exchange shortage, has taken a significant step by signing a currency swap agreement with the United Arab Emirates (UAE), as announced in a joint statement on Tuesday. The agreement, facilitated between the National bank of Ethiopia (NBE) and the Central Bank of the UAE (CBUAE), involves the exchange of Emirati dirham and Ethiopian birr amounting to 3 billion dirhams and 46 billion birr, respectively.
CBUAE Governor Khaled Mohamed Balama emphasized that the bilateral currency swap agreement and the accompanying memorandums of understanding (MoUs) underscore the robust economic cooperation between the UAE and Ethiopia, particularly in trade and investment. He highlighted the UAE's pivotal role in the Ethiopian economy, noting it as a significant source of foreign investment and development finance.
NBE Governor Mammo Mihretu echoed this sentiment, stressing the UAE's crucial support for Ethiopia's economic landscape. He acknowledged the UAE's role not only in providing financial support but also in fostering bilateral economic ties through initiatives aimed at promoting the use of local currencies in cross-border transactions. The signed MoUs also aim to enhance the integration of payment systems and financial technology between the two nations, aiming for deeper economic collaboration.
Ethiopia's current foreign exchange reserves stand at USD3.046 billion, underscoring the pressing need for such agreements amidst ongoing challenges. Negotiations with international financial institutions like the International Monetary Fund (IMF) and World Bank have faced hurdles, hindering Ethiopia's efforts to restructure debt and secure additional funding crucial for stabilizing its economy. Both the IMF and World Bank have urged Ethiopia to implement comprehensive economic reforms and improve fiscal management to effectively address its financial difficulties and ensure sustainable economic growth.
MENAFN17072024000045015839ID1108448612
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.