Ethiopian Oil Supply Company to Receive $670 Million from National Bank of Ethiopia











It has been announced that the Ethiopian Oil Supply Company, which buys and supplies the fuel the country needs from abroad, will receive 670 million dollars from the National Bank of Ethiopia for its payment obligations until sufficient foreign exchange capacity is built.

In addition, the National Bank will provide foreign currency to local banks today, August 1, 2016. He announced that he will conduct a special foreign exchange auction.

According to a report released by the International Monetary Fund at the end of last week, the Ethiopian Oil Supply Company will receive foreign currency from the National Bank of Ethiopia to cover its payment obligations and the cost of oil products imported to Ethiopia in the months of July and August until the foreign exchange rate is traded at the market rate and sufficient foreign exchange capacity is built. .

The report indicates that the amount of foreign currency that the National Bank of Ethiopia will provide to the Ethiopian oil supplier company in a special way cannot exceed 670 million dollars. For this, the report indicates that the Ethiopian oil supplier company will make payments based on the exchange rate of silver at the time for the foreign currency that it receives under special circumstances.

On the other hand, it is known that the National Bank of Ethiopia will hold a special foreign currency auction today to provide foreign currency to local banks.

The first special foreign currency auction was held on August 1, 2016. The National Bank of Ethiopia, which announced that it will be held, also announced that it may issue additional foreign currency auctions in the coming weeks, depending on the market conditions.

Banks who want to participate in the first special foreign exchange auction to be held today can submit their requests to the Directorate of Foreign Exchange Monitoring and Reserve Management of the National Bank of Ethiopia from 4:00 am to 6:00 pm.

He announced that the banks participating in the foreign exchange auction must submit their application by mentioning the amount of foreign currency (dollars) they want and how much Birr (exchange rate) they want to buy one dollar.

Although the National Bank has not disclosed the amount of foreign currency that will be auctioned on the day, it has announced that the winning banks will not be able to get more than 20 percent of the total amount of foreign currency that will be auctioned on the day. The result of the auction will be announced at 9 o’clock on the same day, and the winning banks must make their payment on the same day.

Before the implementation of the market-driven foreign exchange rate system by the National Bank of Ethiopia, banks used to buy one dollar at 57.7 Birr, and on the first day when the market-driven foreign exchange rate system was announced, they gave 74 Birr to one dollar. In the days since the first day, local banks have continued to increase the price of buying dollars by different amounts every day, and Tuesday, July 30, 2016. And they gave a price of 100 to 107 birr for one dollar. Geda Bank is the only bank that offered a purchase price of 107 birr for one dollar, while the average price of the other banks is 100 birr, according to the official information of the banks.

The International Monetary Fund (IMF) has approved 3.4 billion dollars in financial support to support Ethiopia’s transition to a market-oriented foreign exchange rate system and its overall macroeconomic reform programs, of which one billion dollars was transferred to the National Bank account last Friday. At the same time, the World Bank approved a 1.5 billion dollar loan and aid to support Ethiopia’s transition to a market-based foreign exchange rate system.

According to the information obtained by the reporter, the National Bank of Ethiopia will use this foreign currency find in the special foreign exchange auction to be held on August 1.

It will be recalled that the International Monetary Fund issued a report last week detailing the general agreement reached with the Ethiopian government. In this report, it is stated that the market leader of the National Bank of Ethiopia should try to stabilize the foreign exchange rate by offering foreign currency to the country’s banks in an auction from the time the foreign exchange rate is announced until the end of the first two months.