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Ethiopian central bank limits commercial lending to tackle inflation

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Written by

African Business

Published on

22 April 2024

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The National Bank of Ethiopia (NBE) has announced measures to limit the amount of capital being lent by the country’s commercial banks in a bid to bring down inflation.

In a monetary policy statement released last week, the Ethiopian central bank introduced a new rule that restricts banks’ yearly credit expansion to 14%.

Part of the reason for this restriction is that commercial lending in Ethiopia has soared in recent years. In the twelve months ending February 2023, banks lent a total of 382bn birr ($6.9bn) – an 80% increase compared to the 209.6bn birr ($3.8bn) that was lent the year before.

Written by

African Business

Published on

22 April 2024

Copy link