The Practices and Challenges of Foreign Currency Generation In Commercial Bank of Ethiopia
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Date
2023-09-13
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Publisher
AAU
Abstract
The main objective of the study is to examine the challenges of foreign currency generation in
Commercial Bank of Ethiopia, using primary and secondary data source from a survey of a
random sample of 386 respondents/employees. To deal with this, the researcher has used both
descriptive and binary logistic regression model as a tool. In the descriptive analysis part the
CBE’s share reached as low as 8% in 2020/21 from 32% 2014/15. The remittances that except
2015/16 and 2017/18 its growth rate gradually dropped. In econometrics analysis; internal
conflict, absence of foreign currency deposit, less work with development partners and weak
employees’ knowhow have a positive significant effect on the challenges of foreign currency
generation at 1% level of significance (P<0.01) and makes low generation of foreign currency.
Also, work with few industrial parks has a positive significant effect on the challenges of foreign
currency generation at 1% level of significance (P<0.05). Few dominated agricultural export
and National Bank of Ethiopia’s directives have a negative significant effect on the challenges of
foreign currency generation at 1% level of significance (P<0.01). Furthermore, participated in
Africa Opportunity and Growth Act, fair charges of money transfer organizations and less
intermediaries have a negative significant effect on the challenges of foreign currency
generation at 5% level of significance(P<0.05). The researcher has recommended that the
government should stop the internal conflict and maintain peace and security in the country and
formulate policies that help to participate in Africa Growth and Opportunity and Act. Also, the
government should control illegal intermediaries. In addition, the Bank should work with
industrial parks and development partner
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Keywords
Banks, Foreign currency, Currency Earnings