Wednesday, June 19, 2024
BusinessUSD trades 48 percent higher than bank rates

USD trades 48 percent higher than bank rates

In an ever-increasing exchange rate in the parallel market, a US dollar is now up 48 percent higher than the regular market in some areas of the city, The Reporter has learnt.

One week ago, the difference between the legal and black market currencies exchange was around 28 percent, and in less than five days, the exchange in the black market skyrocketed, with the difference reaching more than 48 percent.

Subsequently, a USD is being exchanged for 67 to 70 birr this week, according to sources who have requested to remain anonymous.

Three weeks ago, one USD was exchanged for 44.86 birr in commercial banks, slightly increasing to 45.19 birr at the beginning of last week. However, it was learnt that the parallel market was at 55 birr, and now it is being exchanged for 67 birr and above.

According to financial experts, the difference in the exchange rate between the black market and the banks has been exacerbated by the fact that there is a shortage of foreign currency at the banks.

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A seasoned politician, who also works in one of the private banks, in his recent facebook post said: “In some banks, exporters and importers are buying and selling USD through brokers and banking commission agents.”

It can be recalled that last week the Federal Police Commission announced that the TPLF, which is currently labeled as a terrorist organization, was using illicit financial networks to finance its activities.

 Yonas Mamo, an expert on money laundering at the Financial Intelligence Center, told The Reporter that there are many ways in which money is being smuggled out of the country, including taking across border USD bought and stored illegally on the black market. He also said that Ethiopian birr is taken to border towns like Togo Chale, exchanged into USD there and smuggled out of the country.

According to Yonas, the increase in involvement of individuals in smuggling money is the main reason for the recent shortage of forex and the sharp rise in prices.

Since there are both domestic and foreign individuals, brokers, and investors involved in the process, coordinated activities are crucial to prevent such activities, Yonas underscored.

General Managers of seven money transfer companies have been arrested in connection with an illegal exchange of forex, and the financial intelligence center is undertaking missions to combat such unlawful activities, Yonas highlighted.

Similarly, the Federal Police has also revealed it is investigating 11 individuals and six international money transfer entities involved in the illicit financial network, and more than 100 bank accounts containing 10.2 million birr in 14 commercial banks are also under inspection by the federal police.

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