The state-owned Commercial Bank of Ethiopia (CBE) has announced a pending service charge adjustment for its international business banking services two weeks after the country shifted to a floating exchange regime. CBE released a statement on its Facebook page last night indicating an imminent price shift on its service charges.
The Bank whose assets constituted almost half (49.5 percent and 48.7 percent, respectively) of the whole banking sector at the end of June 2023, according to the National Bank of Ethiopia, offers an array of international trade services.
Alsen Assefa, communication director at Ethiopia’s largest bank, refrained from stating when the exact date of the changes would be and referred Shega to the public statement. “We will announce the details with all media in attendance,” he told Shega.
Nonetheless, CBE currently offers a wide range of international trade services, including documentary credit, or L/C, which is utilized by most importers.
The bank provides a written guarantee to a seller, at the request or instruction of the buyer, to pay or accept and pay a bill of exchange (draft) drawn by the seller. This is for a specified amount within a set time limit and against the required documents.
The Bank also offers documentary collection services, where it handles the seller’s commercial documents, with or without financial documents, based on the seller’s instructions.
According to CBE’s statement, it will adjust some of its international services, but it doesn’t specify which ones. A comprehensive list of CBE’s current service charges is available on the bank’s terms and tariff list.
Industry insiders suspect that the changes are likely due to the recent shift towards a market-based exchange rate regime adopted by the country as part of a larger macroeconomic reform program. Several other state-owned service providers, like the Immigration & Citizenship Services, have announced a nearly fivefold increase in fees over the past two weeks for their passport services.
Economic research indicates a clear connection between the impact of currency exchange rates on merchandise trade, economic growth, capital flows, inflation, and interest rates. Two weeks after Ethiopia announced a market-based exchange regime, the Birr has plummeted against the dollar by nearly 100 percent on official markets.
Follow us
