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03 May, 2008
Commercial banks operating in the country were facing an acute shortage of foreign currency, it was learnt.
Importers are unable to open letters of credit at the local banks because of the dearth of foreign currencies such as US dollars and euros. Some importers told The Reporter that they were unable to import goods because they were told by the banks that there wasn’t adequate foreign currency.
Some importers who tried to open letters of credit were even told by the banks that the payment will not be effected until July. They complained that the problem would lead to price increase on different goods, adding that it had a serious impact on their business.
Officials of the National Bank were not available for comment. A bank professional working for one of the private banks told The Reporter the shortage began two month ago. However, the banker said the problem had been getting more serious in recent weeks. He said the banks were unable to open letters of credit for new customers, adding that old customers were told to wait. The banks are now asking more payments to open letters of credit. The banker said that the fuel price hike in the international market escalated the amount of foreign currency the country spending on oil adding that this could be the reason for the foreign currency shortage.
Another banker who works at Dashen Bank told The Reporter that the recent crackdown on the black market money changers had increased the demand for foreign currency at the banks. “Usually this time of the year is a peak season. However, the major reason for the shortage is the crackdown on the black market,” the banker said.
By Kaleyesus Bekele - Ethiopian Reporter