| National Bank of Ethiopia የኢትዮጵያ ብሔራዊ ባንክ |
|
| Headquarters | Addis Ababa, Ethiopia |
|---|---|
| Established | February 15, 1906 |
| Chairman | Newaye-Christos Gebreab |
| Central bank of | Ethiopia |
| Currency | Ethiopian birr |
| ISO 4217 Code | ETB |
| Base borrowing rate | 8.00% |
| Base deposit rate | 3.00% |
| Website | [1] |
The National Bank of Ethiopia is the central bank of Ethiopia. Its headquarters are in the capital city of Addis Ababa. The bank's name is abbreviated to NBE.
Contents |
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. One of the first projects financed by the bank was the Franco-Ethiopian Railway which reached Addis Ababa in 1917. In 1931, Emperor Haile Selassie introduced reforms into the banking system and the Bank of Abyssinia became the Bank of Ethiopia, a fully government-owned bank providing central and commercial banking services. The Italian invasion in 1935 brought the demise of one of the earliest initiatives in African banking. 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.
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:
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.
Lastly, the proclamation has also raised the paid-up capital of the Bank from Birr 30.0 million to Birr 50.0 million.