Wednesday, July 17, 2024
NewsNBE ups gold purchase premiums in bid to fight smuggling

NBE ups gold purchase premiums in bid to fight smuggling

The National Bank of Ethiopia (NBE) has raised its gold purchase rates as it looks to lure miners away from a lucrative contraband market.

Since last year, the central bank had been offering a 35 percent premium on top of international gold prices to artisanal and commercial miners. However, the incentive was not enough to keep bullion away from the lllicit market, which offers returns based on the parallel exchange rate.

Governor Mamo Mihretu has introduced a new directive that would allow the NBE to up its premium offering to 60 percent or greater in a bid to peel suppliers away from a flourishing contraband trade.

Suppliers offering between 50 grams and three kilograms of gold to the central bank are eligible for the 60 percent premium, while those who supply between three kilograms and 30 kilograms can make up to 67 percent over international market prices.

  1. Miners who supply more than 30 kilograms can get a 70 percent premium.

“Gold is smuggled to contraband markets because the existing purchasing premium was not satisfactory for suppliers,” reads the directive.

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