Wednesday, November 29, 2023
BusinessCash shortage forces Tigray banks to limit withdrawals

Cash shortage forces Tigray banks to limit withdrawals

Reopened branches of banks in Tigray introduce a withdrawal limit as they experience a cash shortage.

Although the amount of cash that is moving in the region is incredibly low due to the war that has been going on for the past two years, banks are now using cash that is already available to serve the needs of their customers.

In Mekelle and Aksum towns, banks do not authorize customers to withdraw a fund exceeding 2000 birr, as they wait cash to be transported into the region by the National Bank of Ethiopia. The limit is higher in towns near to Amhara region, including Shire, where customers are allowed to withdraw as much as 40,000 birr a day.

“In Mekelle, we have reopened our 28 branches but cash is hardly available. We are waiting until the regulatory body transport cash to the city. However, the situation in Shire is improving, as we are able to transport some cash from Gondar with help of security bodies,” said Afewerk Gebretsadik, communications and promotion director of Wegagen.

The war between Tigray fighters and the federal government has disrupted banking services in Tigray for nearly two years. However, in the previous two weeks, the two warring sides took a major stride toward implementing the peace accord struck in Pretoria and Nairobi last month.

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After two years, several towns in the region have been reconnected to the national power grid and telecom service began last week. Banks reopened quickly after telecom services resumed.

Sources say that officials at the central bank promised banks that they would fix the cash shortage.

UN OCHA’s most recent report says that cash worth almost one billion birr has been dispatched to Tigray for humanitarian purposes.

“We are discussing with the central bank about how to get cash to the region so we can meet the needs of our customers in Tigray,” Afework added.

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