The National Bank of Ethiopia (NBE) disclosed that in the first 14 days since the new currency change was commenced, 14 billion birr that was previously circulating outside banking institutions had been deposited while 580 thousand new bank accounts were opened as of October 3, 2020.
Yinager Dessie (Ph.D.), governor of the Bank, who gave a press briefing on the matter two days ago, also disclosed new currency notes worth 67 billion birr had been distributed to bank branches across the country.
The regulatory body who had printed 2.9 million notes worth 262 billion Br, is still sitting with close to 200 billion birr in its hand that’s waiting to be distributed.
The demonetization, which was unveiled during the Ethiopian New Year, aims to collect the money circulated informally outside of the conventional financial institutions, among curbing corruption and contraband goals.
Back in May 2020, after conducting a study, The Ethiopian Bankers Association had disclosed that more 113 billion birr circulates outside of the country’s financial institutions in 2020. As of October 03, 2020, 14 billion birr from this amount has been entered into banks, while 99 billion birr remains at large.
At the current rate from the total amount of money previously roaming outside the reach of banks, on average, one billion birr is now returning to banks’ doors daily.
The contribution of the state giant, Commercial Bank of Ethiopia (CBE), to the new deposit surge is the highest with an average of 16,700 customers opening new saving accounts daily while close to 351 million Birr is being deposited on average, since the beginning of the distribution of the new notes at CBE.
On the other hand, Dashen Bank, a private commercial bank, had reported that 25,000 new accounts and an additional 7000 million birr deposits were mobilized in the process of the currency change.
According to a research paper released by a private equity firm, Cepheus Invest Advisory, in 2020 the total amount of deposits at commercial banks had reached 1.043 trillion birr, with 57 percent of it sitting at CBE while private banks have the rest.
The Ethiopian Economics Association last month had stated that the introduction of the new banknotes has economic implications such as a surge in deposits and savings, removal of fake currency notes, an increase in the size of the taxable economy, and an increase in financial inclusion as the number population with bank accounts increases.
The deadline to change the old currency amounting from 100,000 birr to 1.5 million birr into new ones is to end on October 16, 2020, after 11 days.