Monthly Macroeconomic Indicators for March 2010

The Monthly Macroeconomic Indicators for the Month of March, 2010

1. Inflation In the review period, year-on-year headline inflation stood at 7.4 percent, significantly lower than 23.7 percent registered in the same month of last year. Food inflation also declined by 26.6 percentage points and reached -0.1 percent in March 2010. Annual core inflation, however, was 20.4 percent, slightly above 19.1 percent a year ago. On monthly basis, headline inflation remained unchanged (0.4 percent). However, non-food inflation grew by 0.2 percentage while food inflation dropped by the same magnitude relative to preceding month. The annual average headline inflation was 3.9 percent. On the other hand, annual headline inflation in Addis Ababa reached 12.1 percent in March 2010, showing a 8.7 percentage point slow down compared to a year earlier. Likewise, food inflation declined by 24.1 percentage point to 6.3 percent. However, core inflation rose to 17.5 percent from 12.8 percent in March, 2009. In addition, month –to- month general, food and non-food inflation stood at 1.7, 1.8 and 1.7 percent, respectively. Inflationary pressure in Ethiopia is steadily easing in the review period, due to tight monetary policy, prudent fiscal management and other administrative measures taken by the government.

2. Monetary Aggregates During the review period, broad money supply (M2) reached Birr 96.1 billion indicating an annual growth rate of 19.2 percent due to 70 percent annual increase in net foreign assets and 15.7 percent rise in domestic credit. All types of deposit depicted increases both on monthly and annual basis during the review period.

3. Interest rates With regard to interest rate development, average lending rates of public banks and private banks stood at 9.0 and 12.25 percent. while, average savings deposit rates were 4.0 percent for public and 4.5 percent for private banks. At the same time, average time deposit rate was 4.0 percent for public and 4.15 percent for private banks. Average demand deposit rate stood at 0.25 percent for private banks.

4. Treasury bills market In the month of March 2010, T-bills worth Birr 6.64 billion were supplied to the auction market against demand of Birr 5.33 billion. The average weighted yields for 28day and 182 day T-bills decreased to respective level of 0.759 and 0.563 percent from 0.902 and 0.748 percent in the previous month while that of 91 day slightly increased to 1.078 from 1.065 percent.

5. Inter-bank money market No inter-bank money market dealings took place during the review month.

6. Re-discount window facility No bank applied to access this facility during the month.

7. Exchange rates Average foreign exchange rate in the inter-bank forex market reached Birr 13.38/USD in March,

8. The monthly and annual rates of depreciation of the Birr against USD were 0.35 and 20.72 percent, respectively. Meanwhile, the parallel market rate stood at Birr 14.16/USD. As a result, the premium between the inter-bank and parallel markets slightly rose to 5.85 percent from 4.34 percent in the previous month.

9. External Trade In the review month, total value of exports amounted to USD 184.31 million, which was 18.8 percent less compared to the previous month and 35.6 percent higher than a year ago. Similarly, imports of increased by 164.6 percent to USD 2.2 billion in contrast with USD 823.0 million in a month ago and USD 606.5 million in March, 2009. Thus, monthly merchandise trade deficit widened.

10. Composition of the Financial Sector During the review month, the total number of banks, insurance companies and MFIs stood at 15, 12 and 30, respectively. The total number of bank branches increased to 673 from 617 in March,

11. Similarly the number of insurance branches were up to 207 from 190, the number of forex bureaus also jumped from 302 last year to 331 in the review period. 10.Banking Operations The amount of new loans disbursed by the banking system reached Birr 2.9 billion, about 40.8 percent higher than last year. Similarly, loan collection by the banking system increased by 10.4 percent to Birr 2.05 billion. As a result, outstanding loans of the banking system reached Birr 53.09 billion, 15.8 percent higher than the preceding year. 11.Summary and Conclusion All in all, macroeconomic indicators variables during the month of March 2010 showed steady depreciation of the Birr in the inter-bank forex market, widen merchandise trade deficit, a decrease in inflation, moderate growth rate of money supply, in active money market, increased loan disbursement by the banking system and moderate T-bills market.

12.SELECTED MONTHLY MACROECONOMIC INDICATORS Sr. No Indicators Mar-09 Jun-09 Sept-09 Dec-09 Feb-10 Mar-10 1 Inflation a) Addis Ababa

• Month on month 1.1 0.2 3.6 -0.5 1.1 1.7
• Year-on- year 20.8 7.3 9.1 10.9 11.3 12.1
• Average annual 34.5 29.4 20.4 13.4 10.9 10.3 b) National
• Month on month 0.1 1.4 0.9 0.3 0.4 0.4
• Year-on- year 23.7 2.7 -4.1 7.1 7.0 7.4
• Average annual 45.2 36.4 18.7 8..5 5.0 3.9 2 Investment1

a) Projects approved 1761 1712 1701 1678 N.A N.A b) Capital investment (in mn. Birr) 28,420. 2 142249. 98 28047 21,213. 4 N.A N.A c) Potential employment creation

• Permanent 135271 82418 69136 49864.0 0 N.A N.A
• Temporary 131457 184071 112174 120766 N.A N.A 3 Average Lending Rates (%)
• Public banks 9.0
• Private banks 12.25 4 Average Deposit Rates (%)** a) Saving deposit
• Public banks 4.00
• Private banks 4.50 b) Time deposit
• Public banks 4.00
• Private banks 5.39 4.95 5.13 4.65 4.43 4.15 c) Demand deposit

-Public banks 0.00 -Private banks 0.23 0.23 0.25 0.26 0.26 0.25 5 Inter- bank Money Market Rate (in%)

6 Treasury Bill a) 28 day

• Average weighted price (for 100 Birr) 99.95 99.93 99.95 99.958 99.93 99.94
• Average weighted yield (%) 0.68 0.92 0.68 0.546 0.90 0.76 -Amount Sold 330.0 130.0 330.0 930 1140.00 1180.0 0 b) 91 day
• Average weighted price (for 100 Birr) 99.75 99.75 99.74 99.794 99.74 99.73
• Average weighted yield (%) 1.01 1.00 1.03 0.830 1.06 1.08 -Amount Sold 1886.4 2560.0 1866.4 4366.04 1998.33 2131.0 4 c) 182 day
• Average weighted price (for 100 Birr) 99.72 99.65 99.72 99.642 99.63 99.72
• Average weighted yield (%) 0.56 0.70 0.56 0.720 0.75 0.56 -Amount Sold 1120.0 1100.0 1120.0 206.42 100.00 1120.0 0

Sr. No Indicators Mar-09 Jun-09 Sept-09 Dec-09 Feb-10 Mar-10 7 Budget Deficit (in mn. Birr)1 -5039.0 1344.0 -2472.8 111.9 N.A

3306.2 5 a) Revenue and grants 7188.0 12989 10161.4 14,968. 5 N.A 11,137. 74 b) Expenditure* 12227.0 11645 12634.2 14,856. 62 N.A 14,443. 99

• Recurrent 2073.0 3227 2434.3 3075.85 N.A 2581.7 9
• Capital 6003.0 4212 6275.5 6177.59 N.A 6680.4 6
• Regional transfers 4151.0 4206 3924.4 5603.17 N.A 5181.7 3 8 Monetary Aggregates (in mn. Birr)

8.1 Broad Money 80563.5 82,509. 75 87,155. 52 91,189. 29 93,120. 99 96,047. 32 a) Monthly change (%) 2.5 0.2 1.3 3.4 0.33 3.14 b) Annual change (%) 22.6 21.0 22.0 20.1 18.44 19.22 8.2 Narrow Money Supply 42,853. 18 42,112. 66 43,838. 94 45,876. 36 46,637. 45 48,116. 20

• Currency outside banks 19,264. 00 19,715. 01 18,547. 21 21,755. 84 22,069. 47 23,068. 09 a) Monthly change (%) 1.4 1.5 -1.8 7.9 -1.96 4.52 b) Annual change (%) 14.9 11.7 13.5 24.8 16.16 19.75
• Demand deposits (net) 23,589. 18 22,397. 64 25,291. 73 24,120. 52 24,567. 98 25,048. 11 a) Monthly change (%) 2.7 -2.9 3.2 2.1 1.07 1.95 b) Annual change (%) 35.1 26.6 22.6 5.1 6..91 6.18 8.3 Quasi-Money 37,710. 34 40,397. 09 43,316. 58 45,312. 93 46,483. 54 47,931. 11
• Saving deposit 34,659. 04 37,148. 72 39,814. 53 41,814. 13 42,973. 16 44,362. 45 a) Monthly change (%) 3.3 1.7 1.7 2.1 0.99 3.23 b) Annual change (%) 24.5 26.0 26.5 28.5 28.11 28.00
• Time deposit 3,051.3 1 3,248.3 7 3,502.0 6 3,498.8 0 3,510.3 8 3,568.6 6 a) Monthly change (%) -1.6 -1.2 2.4 1.3 2.02 1.66 b) Annual change (%) -16.4 -3.2 16.7 17.5 13.17 16.96 8.4 Reserve Money (in mn. 41,331. 45,107. 46,894. 46,184. 47,096. 50,349.

Birr) 40 02 41 41 15 09 a) Monthly change (%) 0.4 4.4 3.6 1.3 0.79 6.91 b) Annual change (%) 38.2 26.9 31.1 16.0 14.43 21.82 8.5 Net Foreign Assets 14,863. 6 17,976. 8 19,529. 0 20,793. 0 24,432. 0 25,278. 6 a) National Bank of Ethiopia 9,571.6 11,833. 66 14212.6 14,752. 6 16,672. 2 16,290. 4 b) Commercial banks 5,292.0

6,143.1 5,316.3 6040.4 7,759.8 8,988.2 8.6 Banking statistics(in million.Birr)4

a) Disbursement 2047.8 1624.1 1982.8 2411.6 2,004.7 0 2,883.8 0 b) Collection 1858.3 2879.0 1816.4 2023.0 1,795.1 0 2,051.4 0 c) Outstanding credit of the banking system 45836.8 46004.7 46725.7 50796.8 51,468. 70 53,090. 60 9 Total Net Domestic Credit (in mn. Birr) 85281.6 89,203. 04 91,983. 69 92945.2 08 95,544. 83 98,639. 29 a) Government 29,349. 1 32,786. 5 32,500. 4 28555.8 28,380. 08 30,038. 16 b) Other sectors 55,932. 5 56,416. 5 59,483. 3 64389.4 67,164. 75 68,601. 13 10 Structure of Financial System 10.1 Number of banks 13 13 14 15

• Public 3
• Private 10 10 11 12 10.2 Total number of bank branches 617 636 656 663 670 673 10.3 Number of forex bureaux 302 309 310 323 330.00 331.00

Sr. No Indicators Mar-09 Jun-09 Sept-09 Dec-09 Feb-10 Mar-10 10.4 Number of insurance companies 12

• Public 1
• Private 11 10.5 Total number of insurance branches 190 194 196 202 205 207 10.6 Number of micro￾financing institutions 29 30 11 Reserve and liquidity ratio of the Banking System(in mn.Birr)

11.1 Actual reserves 17,846. 8 19,569. 4 22,893. 0 20,464. 3 19211.9 2 22711. 23 11.2 Excess reserves 6553.0 8,386.0 10,660. 3 7,826.0 6182.01 9229.1 0 11.3 Liquidity ratio (in percent) 39.5 42.4 44.5 41.7 43.50 46.55 12 Export and Import (In mill.USD)

12.1 Total Import 606.46 718.48 552.26 717.49 823.00 2177.8 5 12.2 Total Export 135.90 139.37 92.65 138.6 227.10 184.31 12.3 Coffee Export 12.3.1 Sales value (in mn. USD) NA a) Dry coffee sales value NA b) Washed coffee sales value NA 12.3.2. Sales volume (in Mn Kg) NA a) Dry coffee sales volume (in Mn Kg) NA b) Washed coffee sales volume (in Mn Kg) NA 12.4 ICO 1976 composite USC/LB 105.87 119.05 116.4 124.96 123.37 125.30 13 Exchange Rates 14.1 Average official exchange rate (Birr/US Dollar) 11.082 11.2654 12.5227 12.6207 13.33 13.38

14.2 Average parallel market exchange rate (Birr/US Dollar) 13.2350 13.1531 13.1800 13.46 13.91 14.16 Note: 1 Since monthly data is not available figures are quarterly 2 Includes DBE 3 Includes lending to central government in the form of treasury bills and government bonds and excluding DBE 4 The figure for the last month is estimate for DBE

• Data are available on quarterly basis ** Rate for time and demand deposits is weighted mean after September 2003.