The progress of demonetization


The National Bank of Ethiopia (NBE) which has been through a flurry of activities following the demonetization in mid-September has disclosed that it will continue to supply the new currency to banks so as to keep up with the demand.
On Friday, 16th of October, NBE disclosed that starting from October 17, money presented to banks which is over 100,000 birr will be confiscated.
NBE, on Tuesday October 13, stated that it has already distributed over 90.4 billion birr of which the current number has subsequently risen to 96 billion birr on Friday. This new currency within a span of four weeks is already nearing the currency in circulation (CIC) in the market prior to the demonetization.
According to NBE’s quarterly bulletin of the last budget year that evaluates the overall economic condition of the country, it indicated that CIC in the market is over 139 billion birr.
Information secured from NBE at the press conference early this week shows that currently the fresh money deposited at banks has reached over 31 billion birr. Similarly, the old currency that has been collected stood at 74.9 billion birr of which the collected amounts at banks amounted to 57.5 billion birr.
One of the targets for the currency change was to collect the currencies that are circulating outside of banks. At the press conference Abebe Senbete, Currency Management Directorate Director, said that the central bank will continue to supply the currency as per the demand.
“We cannot limit supply because it is driven by demand. Therefore, we shall continue to provide to fill the demand. If not, the market will be at stake,” he added.
“We think that the issue is at its early stages. It is based on the request of the public. We cannot prevent it since it follows the framework and directives,” he explained.
“So far we are focusing on providing the new currency but we expect in the near future that it would be stabilized,” Abebe said.
The central bank has also said that the new currency is bought by illegal actors and that the public should inform the government. “We have been informed that for instance the new 100 birr note is being sold with 120 birr of the old currency,” Solomon Desta, Vice Governor of NBE, said.
Currently, 6,561 branches have been covered in the new currency change process except one branch in the western part of Ethiopia.
About 273,933 new accounts have been created at banks in almost a month’s time since the currency change commenced.
The central bank has disclosed that those who have more than 100,000 birr to 1.5 million birr should demonetize their money within a month time. That period came to a close on Friday October 16. Yinager Dessie, Governor of NBE on Friday announced that the government will confiscate the old note on hand for those submitting more than 100,000 birr.