US Dollar Shortages: Ethiopia and Nigeria in $100 Million Currency Swap Transaction
According to a report, the central banks of Ethiopia and Nigeria recently consummated a
$100 million currency swap transaction. Under the arrangement, an Ethiopian airliner was paid local currency equivalent to
$100 million while Dangote Cement is said to have received a similar amount of nairas.
The central bank of
Ethiopia is reported to have performed a $100 million currency swap transaction with its
Nigerian counterpart.
According to a local report, the two central banks
resorted to the swap transaction because the arrangement obviates the need for U.S. dollars when settling.
Under the arrangement,
Ethiopian Airlines, which could not retrieve about
$180 million from Nigeria, will receive the local currency equivalent of
$100 million from the National Bank of Ethiopia (NBE).
Meanwhile, the unnamed sources at NBE have reportedly characterized the swap transaction as a
temporary measure.
