Djibouti: Djibouti banks would like to rate the Ethiopian birr

(Horntrade) – The banking center of Djibouti would like to contribute more substantially to the international trade of Ethiopia. But unlike the Djibouti franc, fully convertible and pegged to the dollar, the Ethiopian birr is highly regulated. Djibouti has a solution.

At the initiative of BICMR (Bank of Industry and Commerce Red Sea), a discussion was opened up recently between the Bank of Djibouti and the Central Bank of Ethiopia in order to remove the obstacles faced by traders in the transfer of cons-dollar values of their holdings in Birr. These barriers are a major hindrance to the development of regional trade.

The idea advanced by BICMR is simple: the banks open accounts in Djibouti birr for their clients and that the Central Bank of Ethiopia opened an account back in Birr to the banking Djibouti. A stabilizing device, via a fund dollars which international institutions could participate as to ensure a daily call auction mechanism for trading in the currency of Ethiopia in Djibouti. “If the proposed scheme goes ahead, the trade will be facilitated in Birr and less expensive,” argues Ould Amar Yahya, CEO of the leading bank in Djibouti.

Naturally, the main obstacle is likely to be political. It will not be easy to convince the Ethiopian authorities to delegate such management of their money. Mr. Yahya is optimistic: “The effects of this accord on the Birr are small. There will be no loss of sovereignty of Ethiopia. “However, this solution would be to him a tremendous stimulus for regional economic cycles in global markets.

Prime Minister Dileita Mohamed Dileita, supports this proposal as it considers register entirely in the interest of the Ethiopian economy as to Djibouti. At the Central Bank of Djibouti, “we know this project, but to date we have not received positive feedback from our Ethiopian counterparts,” said Ahmed Osman, somewhat dubiously.

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