Ethiopia says UAE to deposit $1 billion to ease currency shortage

ADDIS ABABA, June 15 (Reuters) – The United Arab Emirates will deposit $1 billion in Ethiopia’s central bank to ease a foreign currency shortage in the Horn of Africa nation, an Ethiopian official said on Friday.

“$1 billion will be deposited in the National Bank (of Ethiopia) in a few days’ time to tackle the foreign currency shortage,” Ahmed Shide, head of Ethiopia’s Government Communications Affairs Office, told Reuters after Ethiopian Prime Minister Abiy Ahmed met Abu Dhabi’s crown prince, Sheikh Mohamed Bin Zayed, in Addis Ababa.

“This deposit will have a significant impact on easing the foreign currency shortage in the country. The sum will be used in economic sectors prioritised by the government,” Shide said.

Despite high economic growth, the landlocked country of 100 million people is heavily dependent on imports.

A severe hard currency crunch caused partly by heavy spending on big infrastructure projects has left the government with the reserves equivalent to less than two months’ worth of imports, according to estimates.

The UAE also agreed to allocate an additional $2 billion “for different investments”, Shide added.

Abiy’s office earlier said he was hosting Sheikh Mohamed for a two-day state visit that would include discussions of security issues in the Horn of Africa and trade.

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