Regulatory Alerts2024-10-16
Emergency Liquidity Assistance Directive No. NBE/ELA/001/2024
The National Bank of Ethiopia has issued this directive to establish a crisis management framework providing temporary Emergency Liquidity Assistance loans to solvent banks facing unforeseen liquidity shortages. Eligible institutions must secure the advances with qualifying collateral, sign bilateral agreements, and demonstrate exhausted interbank options while maintaining forward-looking viability. The framework mandates a maximum six-month tenure with possible rollover, applies an interest rate of the overnight standing lending facility plus two percentage points, and subjects borrowing banks to enhanced supervisory oversight, strict collateral valuation with haircuts, margin calls, and administrative penalties for default.
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