Ethiopia: New Banknotes - Golden Opportunity to Increase Liquidity

The issuance of new currency would increase the liquidity of the banks that have been suffering from cash shortage said economists.

Economist Teke Alem (PhD) told The Ethiopian Herald that the ongoing exchange of old Ethiopian currency by the new ones will for sure increase the bank's cash reserves and deposit. "This in turn will also create ample investment opportunities as banks will be in good financial health and capable of lending the desired amount of money to the investors."

As to him, a saving culture of the community will as well improve in the long run as a large number of people will be bank customer avoiding illicit finical activities.

In parallel to expanding bank's accessibility, the government needs to do a lot of work in raising the confident of the general public in using various services in a given bank, Teke noted.

For Addis Ababa University Assistant Professor of Economics Atilaw Alemu (PhD), the introduction of new banknotes will be used as a best tool to control the various illegal activities in the country.

He, therefore, said now is the right time for the government to focus on building strong and sustainable institutions for the implementation and prevention of money laundering . " One of the most important things in a such action is to get back all the money out of the bank"

It is to be recalled that as of 14th September 2020 , Ethiopia's banks have been engaging in introducing new banknotes across the country. A command post led by the National Intelligence Security Agency and the Federal Police has already been established for curbing any illegal activities that could create havoc in exchanging old currency notes for new ones during three -month window.

More From: Ethiopian Herald

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