APA-Addis Ababa (Ethiopia) The National Bank of Ethiopia (NBE) on Monday announced increase in savings interest rate to five percent from four percent previously with a view to encouraging savers.
It is the first time in a decade that the country makes such an increase in savings interest.
The increase is expected to encourage people to save money, which the government said will also play a role in strengthening the country’s economic activities.
The National Bank of Ethiopia also permitted private banks to make the same 5% increase.
The savings interest rate is reported to have been adjusted taking into consideration the country’s inflation rate, which is now less than 10 per cent.
Last year, the inflation reached over 50%, severely affecting the majority of the public, increasing the price of various commodities.
There are currently around 12 private banks in the country.
Foreign banks and insurance companies are not allowed to operate in Ethiopia, home to around 80 million people.