National Bank of Ethiopia targets full removal of the bank credit growth cap by December 2026.
Credit cap currently limits annual bank lending growth to 24 percent.
Policy shift follows improved macroeconomic conditions and ongoing monetary policy reforms.
NBE plans a gradual and sequenced exit from the credit cap framework.
Reform aligns with transition toward market-based monetary policy tools.
Credit cap was introduced to control inflation and manage excess liquidity.
Why it matters?
The timeline signals regulatory predictability for banks and borrowers. It clarifies when credit allocation will fully shift to market-based mechanisms under NBE oversight.
Imports may rise through expanded trade finance and letters of credit, conditional on foreign exchange availability.
Exports may increase via improved pre- and post-shipment financing for exporters.