National Bank of Ethiopia

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 ETB (ISO 4217)
Bank rate	8.00%
Interest on reserves	3.00%
Website	www.nbe.gov.et/index.html

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.

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

History

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).^[1] 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.^[1]

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.^[2] 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. 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.^[3]

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]

References

1 2 Shin, David H., and Thomas P. Ofcansky (2013) Historical Dictionary of Ethiopia. (Scarecrow Press), pp. 67-9. ISBN 978-0-8108-7194-6
↑ Arnaldo Mauri, "The Short life of the Bank of Ethiopia", Acta Universitatis Danubius,OEconomica, n. 4, 2010
↑ Shinn and Ofansky (2013), pp.67-9.
↑ "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 (2003), "The early development of banking in Ethiopia", International Review of Economics, Vol. 50, N.° 4, pp. 521–543. See also a WP of the same author on this topic
Mauri, Arnaldo (2009), "The re-establishment of the national monetary and banking system in Ethiopia, 1941-1963", The South African Journal of Economic History, Vol. 24, N°. 2, pp. 82–130.
Mauri, Arnaldo, "Monetary Developments and Decolonization in Ethiopia", Acta Universitatis Danubius, Oeconomica, Vol. VI, N°. 1, 2010, pp. 5–16.
Mauri, Arnaldo, "The short life of the Bank of Ethiopia", Acta Universitatis Danubius, Oeconomica, Vol. IX, N°. 4, 2010, pp. 104–116.
Shin, David H., and Thomas P. Ofcansky (2013) Historical Dictionary of Ethiopia. (Scarecrow Press). ISBN 978-0-8108-7194-6

External links

National Bank of Ethiopia official site

Central banks

Global

Global	Bank for International Settlements Basel Committee on Banking Supervision Financial Stability Board

By continent

Africa	Bank of Central African States Central Bank of West African States Bank of Algeria National Bank of Angola Bank of Botswana Bank of the Republic of Burundi Bank of Cape Verde Central Bank of the Comoros Central Bank of the Congo Central Bank of Djibouti Central Bank of Egypt Bank of Eritrea National Bank of Ethiopia Central Bank of The Gambia Bank of Ghana Central Bank of the Republic of Guinea Central Bank of Kenya Central Bank of Lesotho Central Bank of Liberia Central Bank of Libya Central Bank of Madagascar Reserve Bank of Malawi Central Bank of Mauritania Bank of Mauritius Bank Al-Maghrib (Morocco) Bank of Mozambique Bank of Namibia Central Bank of Nigeria National Bank of Rwanda Central Bank of São Tomé and Príncipe Central Bank of Seychelles Bank of Sierra Leone Central Bank of Somalia Bank of Somaliland South African Reserve Bank Bank of South Sudan Central Bank of Sudan Central Bank of Swaziland Bank of Tanzania Central Bank of Tunisia Bank of Uganda Bank of Zambia Reserve Bank of Zimbabwe

Americas	Central Bank of Argentina Central Bank of Aruba Central Bank of The Bahamas Central Bank of Barbados Bermuda Monetary Authority Central Bank of Brazil Bank of Canada Central Bank of Chile Bank of the Republic (Colombia) Central Bank of Cuba Central Bank of Curaçao and Sint Maarten Eastern Caribbean Central Bank Cayman Islands Monetary Authority Central Bank of Ecuador Bank of Guatemala Bank of the Republic of Haiti Central Bank of Honduras Bank of Jamaica Bank of Mexico Central Bank of Nicaragua Central Reserve Bank of Peru Central Bank of Suriname Central Bank of Trinidad and Tobago Federal Reserve System (United States) Central Bank of Uruguay Central Bank of Venezuela

Asia	Da Afghanistan Bank Central Bank of Bahrain Bangladesh Bank Royal Monetary Authority of Bhutan Brunei Currency and Monetary Board Autoriti Monetari Brunei Darussalam National Bank of Cambodia People's Bank of China Hong Kong Monetary Authority Reserve Bank of India Bank Indonesia Central Bank of the Islamic Republic of Iran Central Bank of Iraq Bank of Israel Bank of Japan Central Bank of Jordan National Bank of Kazakhstan National Bank of the Kyrgyz Republic Bank of Korea Central Bank of the Democratic People's Republic of Korea Central Bank of Kuwait Banque du Liban Monetary Authority of Macao Bank Negara Malaysia Maldives Monetary Authority Bank of Mongolia Central Bank of Myanmar Nepal Rastra Bank Central Bank of Oman State Bank of Pakistan Palestine Monetary Authority Bangko Sentral ng Pilipinas Qatar Central Bank Saudi Arabian Monetary Agency Monetary Authority of Singapore Central Bank of Sri Lanka Central Bank of Syria Central Bank of the Republic of China (Taiwan) Bank of Thailand Central Bank of Turkmenistan Central Bank of the United Arab Emirates Central Bank of Uzbekistan State Bank of Vietnam Central Bank of Yemen

Europe	European Central Bank (Eurosystem) National Bank of the Republic of Abkhazia Bank of Albania Central Bank of Armenia National Bank of Austria Central Bank of Azerbaijan National Bank of the Republic of Belarus National Bank of Belgium Central Bank of Bosnia and Herzegovina Bulgarian National Bank Croatian National Bank Central Bank of Cyprus Czech National Bank Danmarks Nationalbank (Denmark) Deutsche Bundesbank (Germany) Bank of England Bank of Estonia Bank of Finland Banque de France National Bank of Georgia Bank of Greece Hungarian National Bank Central Bank of Iceland Central Bank of Ireland Banca d'Italia Central Bank of Kosovo Bank of Latvia Bank of Lithuania Central Bank of Luxembourg National Bank of the Republic of Macedonia Central Bank of Malta National Bank of Moldova Central Bank of Montenegro De Nederlandsche Bank Norges Bank Central Bank of the Turkish Republic of Northern Cyprus National Bank of Poland Banco de Portugal National Bank of Romania Central Bank of Russia National Bank of Serbia National Bank of Slovakia Bank of Slovenia Gosbank (Soviet Union) Bank of Spain Swedish National Bank Swiss National Bank Central Bank of the Republic of Turkey National Bank of Ukraine

Oceania	Reserve Bank of Australia Reserve Bank of Fiji Reserve Bank of New Zealand Bank of Papua New Guinea Central Bank of Samoa Central Bank of Solomon Islands National Reserve Bank of Tonga

Policies and implementation

Policies	Capital requirement Contractionary monetary policy Expansionary monetary policy Basel II Basel III Basel 4

Implementation	Capital control Discount rate Interest rates Money creation Open market operation Sovereign wealth fund

Bretton Woods system

International Monetary Fund World Bank Group International Bank for Reconstruction and Development International Centre for Settlement of Investment Disputes International Development Association International Finance Corporation Multilateral Investment Guarantee Agency

Lists

List of central banks Central banks and currencies of Africa Central banks and currencies of the Caribbean Central banks and currencies of Central America and South America

Names in italics indicate non-sovereign (dependent) territories, former countries, or states with limited recognition

Coordinates: 9°01′02″N 38°45′02″E / 9.01722°N 38.75056°E / 9.01722; 38.75056

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