Ethiopia orders banks to deny foreign currency to businesses importing non-priority goods

Ethiopia has ordered banks to deny foreign currency to businesses importing non-priority goods, in an effort to shore up dwindling foreign reserves in one of Africa’s major economies.

The move effectively freezes the import of dozens of items such as alcohol and cars, as businesses must register with banks to obtain the foreign currency needed to bring goods into the country.

In a letter to Ethiopia’s central bank, the Ministry of Finance said it had become necessary to restrict the use of foreign currency to importing food, medicine and medical equipment, and raw materials for manufacturing.

Industry Minister Melaku Alebel Addis sent a list of 40 products that will not be allowed forex for an indefinite period of time including motorcycles to wall clocks, umbrellas, carpets and soaps, perfumes and cigarettes.

Central bank also announced this month it had blocked nearly 400 bank accounts believed linked to illicit currency trading and promised financial rewards to those who denounced players in the parallel market.