Ethiopia Ends Administered Interest Rates in Landmark Financial Reform

As reported by Addis Insight

Summary

• The National Bank of Ethiopia issued Directive NBE/INT/13/2026, effective January 9, 2026, removing all administered interest rate controls. Banks may now freely set lending and deposit rates across all products.
• The 7% minimum savings rate floor has been scrapped. Banks must submit pricing schedules to the NBE within five working days and file monthly weighted-average rates. NBE retains authority over standing facilities; interbank lending is priced by negotiation.
• BirrValue review: This is a major shift toward market-based monetary policy. Deposit rates may rise from the previous 7% floor, benefiting savers. Lending rates could increase for higher-risk borrowers. For FX users, the reform supports the broader transition to interest-rate-based policy—compare bank rates as competition for deposits may intensify.