Stay Blessed. You are truly amazing, and I have the utmost respect for your perspective on geopolitics and finanace and I would like to point out one thing or two regarding the Forex market in Ethiopia. The market is still very young, and aside from a few to zero seasoned players, the majority of participants-including almost all banks-are relatively new to Forex trading. In particular, spot trading is not yet widely accepted by buyers, and the commission fees must be or close to 1% to make it work for buyers. It’s important to note that with spot Forex trading, the government cannot impose windfall taxes based on policy changes, and only capital gains taxes are applicable at the end of the fiscal year. However, Ethiopia has a long way to go to fully reap the benefits of a floating hard currency. Unfortunately, the learning curve for the banks is quite steep, which is slowing down progress. Many banks are prioritizing short-term profits on spot trades, often at the expense of market stability. They manipulate the timing of trades, which increases costs for importers, putting unnecessary pressure on the broader economy. This, in turn, is exacerbating the issue of a thriving black market for foreign currency, as many are opting for unofficial channels due to unfavorable terms offered by the banks. This restricts the flow of foreign exchange through formal banking channels and adds further strain on the country’s economic environment. In my view, the banks need to be regulated more strictly. Their pursuit of maximum short-term gains, without considering the longer-term impacts on the economy, is leading to a cycle of poor decisions, compounding the challenges Ethiopia faces in stabilizing and growing its Forex market.
