Addis Ababa — - Excess liquidity of the stated owned and privately operated commercial banks have shot up 165 per cent in a year time, The Daily Monitor learnt.

The banks' actual reserves at the National Bank of Ethiopia (NBE) has topped 13 billion birr as of the end of the first quarter of the current Ethiopian fiscal year, while the amount the banks were required to reserve was only 1.9 billion birr, according to NBE's latest statements.

As the first quarter of the current fiscal year ended, the banks' actual reserves have totaled 13.1 billion birr, of which the 11.2 billion birr was an excess.

According to NBE's statements, excess liquidity of commercial banks has continued to pose a challenge to the NBE monitory policies, which "focus on ensuring price stability and creating favorable macroeconomic environment for economic growth." During the reported quarter, the banks reserve money with NBE has registered an annual growth of 124 percent, thereby inflating the total reserve money (which comprises currency in circulation and deposits of commercial banks at NBE) 24.5 billion birr. Currency in circulation, which constituted 44 per cent of the total reserve money, has increased by 34 percent compared against last year to 10.9 billion birr.

In the period under review, the banks have collected loans totaling 2.34 billion birr and mobilized over two billion birr in deposits in the stated period, while disbursing fresh loans amounting 2.2 billion birr.