Ethiopia, facing a significant foreign exchange shortage, signed a currency swap agreement with the United Arab Emirates, a joint statement revealed on Tuesday.
The agreement, inked between the National Bank of Ethiopia (NBE) and Central Bank of the UAE (CBUAE), allows for the exchange of Emirati dirham and Ethiopian birr worth 3 billion dirhams and 46 billion birr.
"The bilateral currency swap agreement and the MoUs (memorandums of understanding) signed today reflect the robust economic cooperation between the UAE and Ethiopia, specifically in the areas of trade and investment," said CBUAE Governor Khaled Mohamed Balama.
NBE Governor Mammo Mihretu stressed highlighted the UAE's crucial role in the Ethiopian economy. He said the UAE is "a significant source of foreign investment and development finance."
Additionally, two memorandums were signed to promote the use of local currencies in cross-border transactions and enhance integration of payment systems and financial technology between the two nations.
Ethiopia, which holds current reserves of $3.046 billion, has been facing a foreign exchange shortage and talks with the International Monetary Fund and World Bank have reached a standstill. These negotiations are part of Ethiopia's efforts to restructure its debt and secure additional funding to stabilize its economy.
The IMF and World Bank have been urging Ethiopia to implement economic reforms and improve fiscal management to address the country's financial challenges.
