The easiest way to stop black markets is to make them white: Legalize, decriminalize, stop taxing excessively, or otherwise remove whatever it is sending those businesses underground to start with.
If the national bank is not competitive in giving good rate of exchange ,customers should be free to shop elsewhere.
Following the national bank's list of banned goods,the price of human hair has already gone up and contraband smugglers are gearing up for business.`in most cases ,luxury goods are paid for and imported by diaspora nationals (no LC from national bank) also pay exorbitant import duty .
Banning and criminalizing the importation of dangerous goods into the country should be the focus of the government .instead we have policy makers who are engaged in setting prohibitive import tax
and getting their hands on diaspora hard earned foreign currency.
Look at the state of the taxis in AA and the ludicrous import duty impeding ethiopian nationals who own car dealership businesses overseas from importing good quality cars into the country.
Re: The easiest way to stop black markets is to make them legal
The spike in the exchange rate – at some point more than double the official rate offered at commercial banks – is unprecedented.
A dealer around the National Theater transacts up to 2,000 dollars a day. He has seen demand for Forex surge over the past two months. He observed that those looking to do business would rather deal with him and his peers than wait months or even years to obtain Forex permits from commercial banks.
Other regulars include foreign nationals and employees of international organisations, who receive their pay in foreign currencies and withdraw a portion of it in cash. Members of the Diaspora are also profitable customers, preferring the parallel market to formal remittance through banking channels. However, the central bank reported nearly 5.3 billion dollars in formal remittances last year.
Although the reported figure is the highest on record, those in the banking industry observe not many customers choose formal channels.
Less than 10 customers have visited a Dashen Bank branch in the area to collect remittances over the past two weeks. It was supposed to be peak season for remittances with the successive New Year and Mesqel holidays. The branch manager, who requested anonymity, would have seen five fold customers come in during this season.
It is a grim situation, likely to grow even more alarming unless policymakers figure out a way to bridge the gap between official and parallel exchange rates. Alemayehu urged them to set higher official exchange rates to encourage formal remittances, and close the gap with the parallel market.
https://addisfortune.news/forex-trouble ... -new-lows/