Addis Ababa, April.21(ENA)--The National Bank of Ethiopia (NBE) says the foreign currency reserve of the country showed an increase of 1.7 billion birr over the last six months.

Presenting the mid term performance report to the Finance and Budgetary Affairs Standing Committee of the House of Peoples Representatives here on Wednesday, Deputy Governor of the Bank Alemseged Assefa said the increase in the foreign currency reserve was nearing to cover the four-and-a-half month import expenditures of the country.

The Deputy Governor attributed the increase during the stated period to 1.4 billion Birr profit in the balance foreign payment and the grace period obtained from donor countries.

The performance of the six months was encouraging as the target was to cover a five months import trade cost.

Alemseged said the net foreign currency accumulation grew by 22 percent owing to foreign aid and loan for the poverty reduction program.

He said the economy of the country was recovering from dearth during the previous year due the drought situation.

The official said the reserve balance of the country would continue to be promising given the timely release of loans and grants, increase of loans to the private sector and increase in the balance recurrent account as well as stable foreign currency situation.

He said the foreign currency income during the mid-term from the export trade amounted to 2.1 billion Birr.

Compared to the same period last year, the income showed a 6.4 percent increase, Alemseged said.

According to the bank official, the improvement in export trade was owing to the increase of income obtained from coffee, oil seeds and ‘qat’.

The foreign currency income obtained from coffee grew by 31.8 while the growth of income from oil seeds was 42 percent. ‘Qat’ accounted for a growth of 71.8 percent.

During the mid-term, goods worth 10.2 billion birr were imported. This amount showed an increase of 2.8 billion Birr compared to the same period last year.

He said the factor that contributed to the growth in the import trade include the increase in the amount of import of fuel, industrial products, machinery, transport materials and expansion of investment as well as decrease of tax levied on imported goods.

After the report, the deputy governor and other bank officials responded to queries from members of the committee.

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