@EthiopianGov – Page 2 – Ethiopian Business Review

Ethiopian Maritime Transport and Logistics has announced a remarkable performance for the past six months, with a profit of ETB 9.3 billion before tax, marking a 188% increase from the previous year. This impressive result also exceeds the institution’s initial target of 6 billion birr in pre-tax profit.

The announcement was made in the presence of Ethiopian Investment Holding Deputy CEO, Habtamu Haile Michael, and other key officials overseeing the institution’s operations.

Berhane Gebreezgar, Head of the Business and Development Department, shared insights on the institution’s pivotal role in Ethiopia’s trade infrastructure. He highlighted that Ethiopian Maritime Transport and Logistics has been instrumental in facilitating the country’s import and export operations, providing comprehensive logistics services. These include transporting factory products, machinery, vehicles, construction materials, and various cargoes by both sea and land.

In the first half of the year, the institution handled 3.9 million tons of import and export cargo, surpassing expectations. Additionally, the revenue generated from these services reached over ETB 46 billion, exceeding the target of ETB 44.1 billion and reflecting a 99% year-on-year growth.

The National Bank of Ethiopia’s (NBE) latest foreign currency auction has sparked confusion among industry stakeholders after concluding at a significantly higher rate than the prevailing market price. While the USD exchange rate stood at ETB 124.0086 on the market, the auction saw USD60 million sold at an average rate of ETB 135.62 per dollar. This unexpected outcome has raised concerns about its impact on the broader market.

A financial expert close to the banking sector explained that for banks, participating in the auction is often their only option to secure the foreign currency needed to cover essential expenses. He noted that NBE holds these auctions to manage forex distribution and stabilize market fluctuations.

In a recent policy shift, NBE has transferred a significant portion of fuel import-related forex responsibilities to commercial banks. Fuel imports require large sums of foreign currency, which could strain reserves. “With payment deadlines for fuel imports approaching, banks likely raised their bids to ensure they could meet their obligations,” the expert said.

Smaller banks also participated aggressively, bidding at higher rates. “They prefer the auction as it offers a better deal compared to purchasing from larger banks, which often charge high commissions,” he added.

A seasoned economist highlighted the uncertainty surrounding future auctions, which has led banks to maximize their forex purchases whenever possible. While acknowledging the auction system’s benefits, he cautioned that the latest auction’s near ETB 136 per USD rate could exert inflationary pressure on the economy. “Exporters may withhold their goods, anticipating further depreciation of the ETB and higher profits in future auctions,” he warned.

According to NBE, 27 banks participated in the auction. Sources indicate that only 12 banks secured foreign currency, with winning bids ranging from a minimum of ETB 130 to a maximum of ETB 141 per dollar. Notably, a single bank reportedly obtained just USD200,000 at the highest rate of ETB 141 per dollar.

Source: The Reporter

Ethiopian Maritime Transport Records 188% Profit Surge, Reaching ETB 9.3 Billion

NBE’s Auction Wraps Up: Why Banks Are Rushing to Secure USD?