US Dollar Shortages: Ethiopia and Nigeria in $100 Million Currency Swap Transaction

According to a report, the cardinal banks of Ethiopia and Nigeria precocious consummated a $100 cardinal currency swap transaction. Under the arrangement, an Ethiopian airliner was paid section currency equivalent to $100 cardinal portion Dangote Cement is said to person received a akin magnitude of nairas.

Ongoing U.S. Dollar Shortages

The cardinal slope of Ethiopia is reported to person performed a $100 cardinal currency swap transaction with its Nigerian counterpart. Under the swap agreement, Ethiopia’s nationalist airliner, which has been incapable to repatriate funds trapped successful Nigeria, took implicit the Nigeria cement institution Dangote Cement’s profits which were likewise stuck successful Ethiopia.

According to a section report, the 2 cardinal banks resorted to the swap transaction due to the fact that the statement obviates the request for U.S. dollars erstwhile settling. As suggested successful the report, the statement is seemingly suitable for Ethiopia and Nigeria which some look ongoing shortages of overseas exchange.

As has been reported by Bitcoin.com News, the 2 countries are among respective African states facing persistent U.S. dollar shortages. The shortages person successful crook led to the maturation of the overseas speech parallel market. Attempts to rein in the parallel marketplace by some cardinal banks person seemingly failed to transmission the travel of the greenback distant from the parallel market.

Under the arrangement, Ethiopian Airlines, which could not retrieve astir $180 cardinal from Nigeria, volition person the section currency equivalent of $100 cardinal from the National Bank of Ethiopia (NBE). Likewise, Dangote Cement, which had implicit $200 cardinal locked successful Ethiopia’s fiscal system, would get paid nairas equivalent to $100 cardinal by the Central Bank of Nigeria.

Meanwhile, the unnamed sources astatine NBE person reportedly characterized the swap transaction arsenic a impermanent measure. Mesfin Tassew, the CEO of the Ethiopian airline, suggested that the swap statement lone applicable to the $100 cardinal and not for the full blocked funds.

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