The National Bank of Ethiopia released the outcome of its Monetary Policy Committee’s fifth meeting, reaffirming a tight policy stance aimed at bringing inflation down to the Bank’s single-digit objective. The Board kept the National Bank Rate at 15%, left standing facility rates unchanged, and maintained the 24% annual credit growth limit until the next committee meeting. Measures to contain monetary expansion included raising banks’ required reserve ratio to a 10% monthly average while keeping the daily requirement at 5%, with banks potentially given three to six months to implement the change. The Board also approved moving the minimum deposit saving rate to a market-determined level set through negotiations between depositors and banks or other financial institutions. The committee cited annual inflation of 10.9% at the end of Hidar 2018 and strong monetary and credit growth, including 38.8% year-on-year broad money growth, 67.3% base money growth and 44.5% growth in banks’ outstanding credit, while noting that liquidity shortages at some banks were being addressed through the interbank money market and the standing lending facility. The next Monetary Policy Committee meeting is scheduled for the end of Megabit 2018, or earlier if required.
National Bank of Ethiopia 2025-12-30
National Bank of Ethiopia keeps policy rate at 15% and maintains 24% credit cap while raising required reserve ratio to 10%
The National Bank of Ethiopia's Monetary Policy Committee maintained its tight policy stance, keeping the National Bank Rate at 15% and the 24% annual credit growth limit. Measures to contain monetary expansion include raising banks' required reserve ratio to a 10% monthly average and moving the minimum deposit saving rate to a market-determined level. The committee noted annual inflation at 10.9% and significant growth in monetary and credit metrics, with liquidity shortages addressed through the interbank money market and standing lending facility.