The National Bank of Ethiopia (NBE) and the Ethiopian Securities Exchange (ESX) have solidified their partnership with a newly signed Memorandum of Understanding (MoU), aimed at bolstering the operations and governance of the nation’s interbank money market. This agreement comes as the market, launched in October 2024, has already facilitated over 377 billion ETB in transactions among financial sector participants.
The MoU establishes a framework for enhanced cooperation, information sharing, and disclosure, prioritizing the protection of market participants, the mitigation of systemic risk, and the maintenance of market integrity and confidence.
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“The interbank money market is a critical component in modernizing Ethiopia’s financial markets, ensuring greater market efficiency, and strengthening monetary policy transmission,”
stated H.E. Mamo Mihretu, Governor of the National Bank of Ethiopia, during the signing ceremony.
The partnership underscores a mutual dedication to cultivating a vibrant and efficient financial ecosystem within Ethiopia. This initiative is expected to play a vital role in boosting market confidence and ensuring financial stability as the country progresses with its financial sector reforms.
The Interbank Money Market, established under NBE Directive No. MFAD/IBM/03/2024 and the Ethiopian Interbank Market Code of Conduct, enables financial institutions to manage their liquidity effectively through short-term borrowing and lending. This mechanism aims to stabilize and predict short-term interest rates, benefiting both businesses and consumers. Further, it serves as a crucial tool for the NBE in implementing its monetary policy. The ESX trading platform provides the technological backbone for this vital financial market.
Source: NBE
