Whereas, the National Bank of Ethiopia is vested with powers, duties and responsibilities of monetary management and regulation and supervision of banks.

Whereas, statutory reserve requirement, which obliges banks to hold a proportion of their deposit balance with the National Bank of Ethiopia, is one of the important monetary policy instruments and prudential regulation tools.

Now, therefore, the National Bank has issued this Directive pursuant to the powers vested in it by Article 16(1) (a) of the National Bank of Ethiopia Establishment (as Amended) Proclamation No.591/2008, and 59(2) of Banking Business Proclamation No. 592/2008 as amended by Banking Business (Amendment) Proclamation No.1159/2019.