Addis Ababa, Ethiopia (25 October 2022)
Ethiopia’s Ministry of Trade and Regional Integration implemented price caps a little more than a year ago in order to combat unfair competition in commodity access at the Ethiopian Commodities Exchange (ECX). However, the cap was lifted a week ago as commodity hoarding dropped significantly.
The measure was initially taken, according to experts, because exporters’ primary goal had become the earning of hard currency for their import businesses. They sold at lesser prices than they paid at the local market, paying little attention to the effect on the market and contributing to value loss and hoarding.
While some specialists still opine that the cap should remain in place, Kassahun Gofe, State Minister of MoTRI, argued that, as hoarding fell and stock rebalanced, continuing the restriction will cause the trading practice to prosper without ECX.
Source: Capital Newsletter
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