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Ethiopia Changed its Currency Notes: How this move could enhance Stability & Financial Accessibility?

Dumessa Olkeba Furi | Sep 14, 2020

We have heard the News that Ethiopia! changed Currency Notes! The announced decision by Prime Minister H.E Dr. #AbiyAhmedAli is expected to bring many benefits, primarily for the country’s stability and enhance financial transparency of various appointed officials.

PMAbiyAhmed (PhD) announced the change of currency notes today following EthiopianNewYear 2013!

It is told that the new currency notes have incorporated i) added security features ii) One More Currency denomination (200 ETB)- which represents the largest #denomination ever (raising the earlier largest denom of 100 ETB). Other minor feature changes such as the colors and symbols on each note were also observed. The New 200ETB note has featured the dove with olive branch in its beak- Symbolizing Peace that matches an emblem of the first established MinistryofPeace in Ethiopia by H.E PM AbiyAhmed in 2018.

The Change of Currency Notes was a long waited decision! I think the decision will bring three basic & essential benefits tho the country (economy, peace & security):

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1) It largely supports the efforts of controlling crimes being financed by millions of informally circulating cash as a means of destabilizing the country (cuts illegal arms trafficking). Ethiopia is currently in a period of political transition to democracy and many tensions are going on as a challenge to the new reforms spearheaded by PM Dr. @AbiyAhmedAli. To this end, many illegal activities such as illicit arms trafficking, supporting the opponents are supported financially, most likely using an illegally piled up cash and printed counterfeit notes. The change of currency would expose this and greatly reduce chance of widening the stability crisis, which Z country has recently passed through.

2) It gives good chances for #Banks to bring z large non-banked society to bank outlets & recruit new customer bases by opening bank A/Cs!The economic benefits of currency change is generally achieved through this approach. Returning large proportion of money into bank system will serve a lot of purposes: reduce printing cost, enhance digital banking; enhance government’s tax collection; improve resource mobilization; & financial inclusion.

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It is well known fact that majority of Ethiopian Society has no bank accounts and large proportion of Printed Currency Notes are circulating out of the banking system. Such moves, if coordinated & well planned, will give high chance for banks to cross-sell their banking products to non-banked society coming for currency replacement from all over the country. The currency change will force them to visit banks, at least once to exchange their old currency to new ones.

3) In combination with other NBE directives & laws, it in some ways helps to fight corruption & Money laundering if #effected sooner. This may help to identify and enforce the recently issued directives of National Bank (NBE) that criminalizes holding over ETB 1.5 million cash and daily cash withdrawal of over 200,000 ETB from banks.

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