National Bank of

Ethiopia

This article relies too much on references to

primary sources. Learn more

The National Bank of Ethiopia (NBE) is the

central bank of Ethiopia. Its headquarters
are in the capital city of Addis Ababa. Dr.
Yinager Desse is the current governor of
the bank.[1]
 National Bank of Ethiopia
የኢትዮጵያ ብሔራዊ ባንክ

Headquarters Addis Ababa, Ethiopia

Coordinates 9°01′02″N 38°45′02″E

Established February 15, 1906

Governor Dr. Yinager Desse

Central bank of Ethiopia

Currency Ethiopian birr

ETB (ISO 4217)

Bank rate 8.00%

Interest on reserves 3.00%

Website nbe.gov.et
The bank is active in promoting financial
inclusion policy and is a member of the
Alliance for Financial Inclusion (AFI) .

History

Bank of Ethiopia (1934)

1934
February 15, 1906, marked the beginning
of banking in Ethiopia when the first Bank
of Abyssinia was inaugurated by Emperor
Menelik II. It was a private bank whose
shares were sold in Addis Ababa, New
York, Paris, London, and Vienna. The bank
opened numerous branches including
ones in Harar (1906), Dire Dawa (1908),
Gore (1912), and Dese (1920). One of the
first projects the bank financed was the
Franco-Ethiopian Railway which reached
Addis Ababa in 1917. The bank then
opened a transit office in Djibouti in
1920.[2]
In 1931, Emperor Haile Selassie
introduced reforms into the banking
system. The Bank of Abyssinia was
liquidated the newly established Bank of
Ethiopia, a fully government-owned bank,
taking over management, staff and
premises of the ceased bank. The Bank of
Ethiopia provided central and commercial
banking services to the country. However,
the Italian invasion in 1935 brought the
demise of one of the earliest initiatives in
African banking.[3] During the Italian
occupation, Italian banks were active in
Ethiopia.
On April 15, 1943, the State Bank of
Ethiopia became the central bank and was
active until 1963. By the time it ceased
operations in 1963, the State Bank of
Ethiopia had established 19 domestic
branches, a branch in Khartoum, and a
transit office in Djibouti.[2]

The National Bank of Ethiopia was

established in 1963 by Proclamation 206
of 1963 and began operation in January
1964. The establishment of the new
organization was aided by U.S Department
of State emissary, Earle O. Latham, who
was the first Vice President of the Federal
Reserve Bank of Boston.
Prior to this proclamation, the bank carried
out dual activities i.e. commercial banking
and central banking. The proclamation
raised the bank's capital to 10 million
Ethiopian Dollars and granted broad
administrative autonomy and juridical
personality. Following the proclamation
the National Bank of Ethiopia was
entrusted with the following
responsibilities:

To regulate the supply, availability and

cost of money and credit.
To manage and administer the country's
international reserves.
 To license and supervise banks and hold
commercial banks reserves and lend
money to them.
To supervise loans of commercial banks
and regulate interest rates.
To issue paper money and coins.
To act as an agent of the Government.
To fix and control the foreign exchange
rates.

However, monetary and banking

proclamation No. 99 of 1976 came into
force on September 1976 to shape the
bank's role according to the socialist
economic principle that the country
adopted. Hence the bank was allowed to
participate actively in national planning,
specifically financial planning, in
cooperation with the concerned state
organs. The bank's supervisory area was
also increased to include other financial
institutions such as insurance institutions,
credit cooperatives and investment-
oriented banks. Moreover, the
proclamation introduced the new
'Ethiopian birr' in place of the former
Ethiopian Dollar that ceased to be legal
tender.

The proclamation revised the bank's

relationship with Government. It initially
raised the legal limits of outstanding
government domestic borrowing to 25% of
the actual ordinary revenue of the
government during the proceeding three
budget years as against the proclamation
206/1963, which set it to be 15%.

This proclamation was in force till the new

proclamation issued in 1994 to reorganize
the bank according to the market-based
economic policy so that it could foster
monetary stability, a sound financial
system and such other credit and
exchange conditions as are conductive to
the balanced growth of the economy of
the country. Accordingly, the following are
some of the powers and duties vested in
the bank by proclamation 83/1994.

Regulate the supply and availability of

money and credit and applicable interest
and other hanges.
Set limits on gold and foreign exchange
assets which banks and other financial
institutions authorized to deal in foreign
exchange and hold in deposits.
Set limits on the net foreign exchange
position and on the terms and amount
of external indebtedness of banks and
other financial institutions.
Make short and long-term refinancing
facilities available to banks and other
 financial institutions.

Lastly, the proclamation has also raised

the paid-up capital of the bank from Birr
30.0 million to Birr 50.0 million.

Financial inclusion
The National Bank of Ethiopia is one of the
original 17 regulatory institutions to make
specific national commitments to financial
inclusion under the Alliance for Financial
Inclusion's (AFI) Maya Declaration .[4]

See also
Central banks and currencies of Africa
Commercial Bank of Ethiopia
 Economy of Ethiopia

References
1. "National Bank Of Ethiopia -
Governance of the Bank" .
www.nbe.gov.et. Retrieved
2016-09-12.
2. Shinn & Ofcansky (2013), p. 67–69
3. Mauri (2010)
4. "Maya Declaration Urges Financial
Inclusion for World's Unbanked
Populations - RIVIERA MAYA, Mexico,
Sept. 30, 2011 /PRNewswire-
USNewswire/" . Mexico:
 Prnewswire.com. Retrieved
2012-02-24.

Bibliography …

Mauri, Arnaldo (December 2003). "The

Early Development of Banking in
Ethiopia". RISEC: International Review of
Economics and Business. 50 (4): 521–
543. See also a WP of the same author
on this topic [1]
Mauri, Arnaldo (2009-09-30). "The Re-
Establishment of the National Monetary
and Banking System in Ethiopia, 1941-
1963" . The South African Journal of
Economic History. Rochester, NY. 24 (2):
82–130.
 Mauri, Arnaldo (2010-05-18). "Monetary
Developments and Decolonization in
Ethiopia" . Acta Universitatis Danubius.
Œconomica. 6 (1): 5–16.
Mauri, Arnaldo (2010-12-26). "The Short
Life of the Bank of Ethiopia" . Acta
Universitatis Danubius. Œconomica. 6
(4): 104–116.
Shinn, David H.; Ofcansky, Thomas P.
(2013-04-11). Historical Dictionary of
Ethiopia . Scarecrow Press.
ISBN 9780810874572.

External links
Official website
Retrieved from
"https://en.wikipedia.org/w/index.php?
title=National_Bank_of_Ethiopia&oldid=876472425"

Last edited 11 months ago by an anonymous user

Content is available under CC BY-SA 3.0 unless

otherwise noted.