How to understand Central Banks balance sheets in 5 minutes.
We often hear about QE, QT, money printing, and similar concepts.
To fully understand these, it's important to go back to the basics.
Here is how the balance sheet of a Central Bank (Fed here) works
➡️ Assets
1️⃣ Securities Held Outright
These are the bonds that the Central Bank owns.
In normal times, this amount is relevatively small but if the Fed embarks in quantitative easing operations it can grow very large.
That's why today the Fed owns $7 trillion (!) worth of securities!
2️⃣ Bank Term Funding Program
One of the Fed Loans program, which was created to stop the bleeding during the March 2023 banking turmoil: banks could lend Treasuries to the Fed and receive liquidity at par whatever the price of their bonds was!
These lending facilities are another way to create liquidity for Central Banks
3️⃣ Gold
Central Banks often own foreign denominated assets and Gold
That's because their corporates sell goods or services abroad, and therefore foreign currencies enter the domestic banking system.
Foreign reserves are used to manage and stabilize FX markets if necessary.
Central Banks also buy Gold to diversify their foreign holdings and have a ''hard'' asset which can't be devalued.
➡️ Liabilities
1️⃣ Currency
The private sector's most used form of money are bank deposits - we move money mostly via bank transfers today.
But coins and bills still exist, and these are a liability for the Fed and an asset for the banking sector.
2️⃣ Reverse repurchase agreements
The famous RRP: a special instrument created for money markets so they could deposit money at the Fed. This was created when T-Bills were yielding 0% and the excess money floating around in MMF could bring T-Bills yield into negative (!) territory.
In order to create a release valve for this excess liquidity, the Fed created the RRP.
3️⃣ Treasury General Account (TGA)
This is the account that the US Treasury department holds at the Fed.
Think of it like their checking account: the government can always choose to unlock some of the money in the TGA and spend it in the real economy or vice versa.
Increases or decreases in the TGA are important to monitor because they tell you whether the government is adding or removing resources to the private sector and liquidity for markets.
❗️Reserve balances ( = LIQUIDITY, in red)
This item is the one most often referred to as ''liquidity'': it's the amount of reserves that US commercial banks hold at the Fed.
Source; Alfonso Peccatiello (LinkedIn)
@PatternFin
We often hear about QE, QT, money printing, and similar concepts.
To fully understand these, it's important to go back to the basics.
Here is how the balance sheet of a Central Bank (Fed here) works
➡️ Assets
1️⃣ Securities Held Outright
These are the bonds that the Central Bank owns.
In normal times, this amount is relevatively small but if the Fed embarks in quantitative easing operations it can grow very large.
That's why today the Fed owns $7 trillion (!) worth of securities!
2️⃣ Bank Term Funding Program
One of the Fed Loans program, which was created to stop the bleeding during the March 2023 banking turmoil: banks could lend Treasuries to the Fed and receive liquidity at par whatever the price of their bonds was!
These lending facilities are another way to create liquidity for Central Banks
3️⃣ Gold
Central Banks often own foreign denominated assets and Gold
That's because their corporates sell goods or services abroad, and therefore foreign currencies enter the domestic banking system.
Foreign reserves are used to manage and stabilize FX markets if necessary.
Central Banks also buy Gold to diversify their foreign holdings and have a ''hard'' asset which can't be devalued.
➡️ Liabilities
1️⃣ Currency
The private sector's most used form of money are bank deposits - we move money mostly via bank transfers today.
But coins and bills still exist, and these are a liability for the Fed and an asset for the banking sector.
2️⃣ Reverse repurchase agreements
The famous RRP: a special instrument created for money markets so they could deposit money at the Fed. This was created when T-Bills were yielding 0% and the excess money floating around in MMF could bring T-Bills yield into negative (!) territory.
In order to create a release valve for this excess liquidity, the Fed created the RRP.
3️⃣ Treasury General Account (TGA)
This is the account that the US Treasury department holds at the Fed.
Think of it like their checking account: the government can always choose to unlock some of the money in the TGA and spend it in the real economy or vice versa.
Increases or decreases in the TGA are important to monitor because they tell you whether the government is adding or removing resources to the private sector and liquidity for markets.
❗️Reserve balances ( = LIQUIDITY, in red)
This item is the one most often referred to as ''liquidity'': it's the amount of reserves that US commercial banks hold at the Fed.
Source; Alfonso Peccatiello (LinkedIn)
@PatternFin
🌍This graphic displays the economic dominance of the United States among the G7 economies in 2024 with a GDP.
#GDP #G7
©️ Invest
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#GDP #G7
©️ Invest
@PatternFin
Quarterly Macroeconomic Updates on the Etiopian Economy.pdf
1.1 MB
Quarterly macroeconomic update!
This quarterly macroeconomic report provides an update on the macroeconomic situation in
Ethiopia, focusing on two key macroeconomic developments with significant implications for the
Ethiopian economy.
#EEA
@PatternFin
#MacroeconomicReform #Forex #HGER
This quarterly macroeconomic report provides an update on the macroeconomic situation in
Ethiopia, focusing on two key macroeconomic developments with significant implications for the
Ethiopian economy.
#EEA
@PatternFin
#MacroeconomicReform #Forex #HGER
Deposit Growth YoY.pdf
28 KB
DEPOSIT GROWTH YEAR ON YEAR- is it increasing at an increasing rate?
Awash Bank, Bank of Abyssinia, Dashen Bank, Hibret Bank & Zemen Bank
@PatternFin
Awash Bank, Bank of Abyssinia, Dashen Bank, Hibret Bank & Zemen Bank
@PatternFin
The Ethiopian banking sector is transforming as it adapts to new challenges and opportunities post-2024. While the industry celebrated a "golden year" in 2020-21, driven by favorable policies and economic recovery, the future presents a more complex environment. Challenges such as inflation, market saturation, rising competition, and the introduction of Ethiopia’s capital market have prompted CEOs of major banks to underscore the need for strategic recalibration. The status and strategies of key banks reflect varying levels of preparedness and adaptability to these emerging dynamics.
Although deposits continue to grow in absolute terms year on year, the rate of increase has been on a declining trend. The exceptional growth observed during the 2020-21 period, fueled by regulatory changes and economic recovery, has not been sustained at the same pace in subsequent years. Factors such as inflation, market saturation, and emerging alternatives like TeleBirr and soon capital market might accelerate the slow-down momentum. To address these challenges, banks must innovate and focus on customer-centric strategies to ensure sustained growth and competitiveness in a transforming financial landscape.
©️#M_Tesfaye, FCCA, MBA
#AwashBank #BankofAbysinia #DashenBank #HibretBank #ZemenBank #TeleBirr #LIB #CBE
@PatternFin
Although deposits continue to grow in absolute terms year on year, the rate of increase has been on a declining trend. The exceptional growth observed during the 2020-21 period, fueled by regulatory changes and economic recovery, has not been sustained at the same pace in subsequent years. Factors such as inflation, market saturation, and emerging alternatives like TeleBirr and soon capital market might accelerate the slow-down momentum. To address these challenges, banks must innovate and focus on customer-centric strategies to ensure sustained growth and competitiveness in a transforming financial landscape.
©️#M_Tesfaye, FCCA, MBA
#AwashBank #BankofAbysinia #DashenBank #HibretBank #ZemenBank #TeleBirr #LIB #CBE
@PatternFin
👍1
አንበሳ ኢንተርናሽናል ባንክ አ.ማ.
አንበሳ ኢንተርናሽናል ባንክ አ.ማ. በተገባደደው የበጀት ዓመት ከታክስ በፊት ብር 940.7 ሚሊዮን ትርፍ አስመዘገበ ይህ አሃዝ ካለፈው ዓመት ተመሳሳይ ወቅት ጋር ሲነፃፀር የ26 በመቶ ጭማሪ አሳይቷል፡፡ የባንኩ ጠቅላላ ሀብት እስከ ተገባደደው በጀት ዓመት ድረስ ብር 43.1 ቢሊዮን ደርሷል። አጠቃላይ የተቀማጭ ገንዘብ መጠን ደግሞ ብር 35.6 ቢሊዮን የደረሰ ሲሆን፤ ካለፈው ዓመት ተመሳሳይ ወቅት ጋር ሲነፃፀር የ30 በመቶ ዕድገት እና ጠቅላላ የአስቀማጭ ደንበኞች ቁጥር 2 ሚሊዮን ደርሷል ይህም ካለፈው የበጀት ዓመት በ19 በመቶ ዕድገት ማስመዝገብ ተችሏል፡፡ (Capital)
@PatternFin
አንበሳ ኢንተርናሽናል ባንክ አ.ማ. በተገባደደው የበጀት ዓመት ከታክስ በፊት ብር 940.7 ሚሊዮን ትርፍ አስመዘገበ ይህ አሃዝ ካለፈው ዓመት ተመሳሳይ ወቅት ጋር ሲነፃፀር የ26 በመቶ ጭማሪ አሳይቷል፡፡ የባንኩ ጠቅላላ ሀብት እስከ ተገባደደው በጀት ዓመት ድረስ ብር 43.1 ቢሊዮን ደርሷል። አጠቃላይ የተቀማጭ ገንዘብ መጠን ደግሞ ብር 35.6 ቢሊዮን የደረሰ ሲሆን፤ ካለፈው ዓመት ተመሳሳይ ወቅት ጋር ሲነፃፀር የ30 በመቶ ዕድገት እና ጠቅላላ የአስቀማጭ ደንበኞች ቁጥር 2 ሚሊዮን ደርሷል ይህም ካለፈው የበጀት ዓመት በ19 በመቶ ዕድገት ማስመዝገብ ተችሏል፡፡ (Capital)
@PatternFin
አማራ ባንክ
አማራ ባንክ ከኪሳራ ተስፈንጥሮ በመዉጣት ከ 550 ሚሊዮን ብር በላይ የተጣራ ትርፍ ማስመዝገብ መቻሉን አስታዉቋል ። ከ 140 ሺህ በላይ ባለአክሲዮኖችን በመያዝ የባንክ ዘርፉ ላይ እየተንቀሳቀሰ የሚገኘዉ ባንኩ በ2015/16 ሂሳብ ዓመት አጠቃላይ ገቢ በ146 በመቶ እድገት አሳይቶ ብር 4.4 ቢሊየን ደርሷል ብሏል።
ዋና ስራ አስፈፃሚው ዮሐንስ አያሌዉ (ዶ/ር) በበኩላቸው ደግሞ እንደተናገሩት የባንኩን የካፒታል ገበያ ስራዎች ዝግጁነት ለማሳደግ የካፒታል ገበያ እና የኢንቨስትመንት ባንኪንግ ፕሮጀክቶችን በማዘጋጀት ላይ እንገኛለን ብለዋል።የባንኩ የሃብት መጠን 35.2 ቢሊየን ብር መድረሱን እና የመደበኛና የወለድ ነጻ የባንክ አገልግሎት አጠቃላይ ተቀማጭ በ26 በመቶ ጨምሮ ወደ 25.1 ቢሊየን ብር ማደጉን በሪፖርቱ ገልጿል ። (LIB Page)
@PatternFin
አማራ ባንክ ከኪሳራ ተስፈንጥሮ በመዉጣት ከ 550 ሚሊዮን ብር በላይ የተጣራ ትርፍ ማስመዝገብ መቻሉን አስታዉቋል ። ከ 140 ሺህ በላይ ባለአክሲዮኖችን በመያዝ የባንክ ዘርፉ ላይ እየተንቀሳቀሰ የሚገኘዉ ባንኩ በ2015/16 ሂሳብ ዓመት አጠቃላይ ገቢ በ146 በመቶ እድገት አሳይቶ ብር 4.4 ቢሊየን ደርሷል ብሏል።
ዋና ስራ አስፈፃሚው ዮሐንስ አያሌዉ (ዶ/ር) በበኩላቸው ደግሞ እንደተናገሩት የባንኩን የካፒታል ገበያ ስራዎች ዝግጁነት ለማሳደግ የካፒታል ገበያ እና የኢንቨስትመንት ባንኪንግ ፕሮጀክቶችን በማዘጋጀት ላይ እንገኛለን ብለዋል።የባንኩ የሃብት መጠን 35.2 ቢሊየን ብር መድረሱን እና የመደበኛና የወለድ ነጻ የባንክ አገልግሎት አጠቃላይ ተቀማጭ በ26 በመቶ ጨምሮ ወደ 25.1 ቢሊየን ብር ማደጉን በሪፖርቱ ገልጿል ። (LIB Page)
@PatternFin
Siket Bank
Siket Bank announced impressive financial results, with a net profit of 1.54 billion Br, representing a 50pc surge from the preceding year. The bank's paid-up capital witnessed a 25pc increase, reaching 5.46 billion Br, exceeding the minimum capital requirement set by the National Bank of Ethiopia.
The bank’s stellar financial performance is further evidenced by a substantial 36pc growth in total deposits, which now stand at 4.9 billion Br. Formerly Addis Credit & Saving Institution, Siket Bank has made significant investments in its infrastructure, implementing a new core banking system and constructing a state-of-the-art data center. (Addis Fortune)
@PatternFin
Siket Bank announced impressive financial results, with a net profit of 1.54 billion Br, representing a 50pc surge from the preceding year. The bank's paid-up capital witnessed a 25pc increase, reaching 5.46 billion Br, exceeding the minimum capital requirement set by the National Bank of Ethiopia.
The bank’s stellar financial performance is further evidenced by a substantial 36pc growth in total deposits, which now stand at 4.9 billion Br. Formerly Addis Credit & Saving Institution, Siket Bank has made significant investments in its infrastructure, implementing a new core banking system and constructing a state-of-the-art data center. (Addis Fortune)
@PatternFin
Coffee price surges to highest on record
Coffee drinkers may soon see their morning treat get more expensive, as the price of coffee on international commodity markets has hit its highest level on record.
On Tuesday, the price for Arabica beans, which account for most global production, topped $3.44 a pound (0.45kg), having jumped more than 80% this year. The cost of Robusta beans, meanwhile, hit a fresh high in September.
It comes as coffee traders expect crops to shrink after the world's two largest producers, Brazil and Vietnam, were hit by bad weather and the drink's popularity continues to grow.
የዓለም ቡና ዋጋ በታሪክ ከፍተኛው ላይ ደረሰ፡፡
ከውሃ ቀጥሎ ሰዎች ዘብዝተው የሚጠጡት ቡና በየጊዜው ዋጋው እየጨመረ ይገኛል፡፡
የዓለማችን ዋነኛ ቡና አምራች ከሆኑ ሀገራት መካከል የሚጠቀሱት ብራዚል እና ቬትናም በጎርፍ እና በድርቅ መመታታቸው በዓለም ቡና ዋጋ ላይ አሉታዊ አስቷጽዖ አድርሷል፡፡
በዚህ ምክንትም አሁን ላይ አንድ ኪሎ ቡና በዓለም ገበያ ላይ በ6 ነጥብ 8 ዶላር እየተሸጠ ሲሆን ኢትዮጵያ የምታመርተው ኮፊ አረቢካ የሚባለው የቡና ዝርያ ደግሞ ውድ ምርት ሆኗል፡፡
BBC
#Coffee #CoffeeArabica #ቡና
Coffee drinkers may soon see their morning treat get more expensive, as the price of coffee on international commodity markets has hit its highest level on record.
On Tuesday, the price for Arabica beans, which account for most global production, topped $3.44 a pound (0.45kg), having jumped more than 80% this year. The cost of Robusta beans, meanwhile, hit a fresh high in September.
It comes as coffee traders expect crops to shrink after the world's two largest producers, Brazil and Vietnam, were hit by bad weather and the drink's popularity continues to grow.
የዓለም ቡና ዋጋ በታሪክ ከፍተኛው ላይ ደረሰ፡፡
ከውሃ ቀጥሎ ሰዎች ዘብዝተው የሚጠጡት ቡና በየጊዜው ዋጋው እየጨመረ ይገኛል፡፡
የዓለማችን ዋነኛ ቡና አምራች ከሆኑ ሀገራት መካከል የሚጠቀሱት ብራዚል እና ቬትናም በጎርፍ እና በድርቅ መመታታቸው በዓለም ቡና ዋጋ ላይ አሉታዊ አስቷጽዖ አድርሷል፡፡
በዚህ ምክንትም አሁን ላይ አንድ ኪሎ ቡና በዓለም ገበያ ላይ በ6 ነጥብ 8 ዶላር እየተሸጠ ሲሆን ኢትዮጵያ የምታመርተው ኮፊ አረቢካ የሚባለው የቡና ዝርያ ደግሞ ውድ ምርት ሆኗል፡፡
BBC
#Coffee #CoffeeArabica #ቡና
Data from the Ethiopian Communications Authority (ECA) shows a significant increase in foreign investment within the country's telecommunications sector.
Annual FDI in telecommunications services (fixed, mobile, and internet) has grown steadily, from 1.7 billion birr in 2017 to 17.4 billion birr by 2022.
This trend aligns with Ethiopia's recent policy reforms to attract foreign investment into its telecommunications sector.
©️Shega
#Safaricom #Ethiotelecom #FDI #Ethiopia
Annual FDI in telecommunications services (fixed, mobile, and internet) has grown steadily, from 1.7 billion birr in 2017 to 17.4 billion birr by 2022.
This trend aligns with Ethiopia's recent policy reforms to attract foreign investment into its telecommunications sector.
©️Shega
#Safaricom #Ethiotelecom #FDI #Ethiopia
Governor Mamo Mihretu hosted a briefing for a large group of CEOs of major African banks on the sidelines of the African Financial Summit held in Casablanca, Morocco. The Governor highlighted that Ethiopia is one of Africa’s last remaining finance frontiers and noted the banking sector’s significant recent growth in terms of assets, capital, and profits as well as the untapped opportunities for new entrants to provide fresh competition through innovative product and service offerings. There was very strong and enthusiastic interest expressed by both banks and DFIs in the Ethiopian market, especially in light of the recent improvement in macro, monetary, and financial sector policies. (NBE)
#DIgitalBanking
#DFS
#ForeignBanks
#Fintech
@PatternFin
#DIgitalBanking
#DFS
#ForeignBanks
#Fintech
@PatternFin
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Over the past decade, the outreach of commercial banks in Ethiopia has seen notable growth. This chart shows the number of commercial bank branches per 100,000 adults from 2004 to 2022, highlighting the increasing accessibility of banking services.
#Shega
#BankBranches
#Commercial_Banks
@PatternFin
#Shega
#BankBranches
#Commercial_Banks
@PatternFin
በሀረሪ ክልል ለኮሪደር ልማት ስራዎችን የሁለት ሚልዮን ብር ድጋፍ እንዲያደርጉ የተጠየቁ የባንክ ቅርንጫፎች በጊዜው ገንዘቡን ገቢ አላደረጋችሁም በሚል በዚህ መልኩ እንዲታሸጉ ተደርጓል፡፡
ቅርንጫፎች የመወሰን ስልጣን እንደሌላቸው እየታወቀ እንደዚህ ማድረግ ለምን እንዳስፈለገ ግልፅ አይደለም፡፡
#ባንኮች
#የባንኮች_ማህበር
@PatternFin
ቅርንጫፎች የመወሰን ስልጣን እንደሌላቸው እየታወቀ እንደዚህ ማድረግ ለምን እንዳስፈለገ ግልፅ አይደለም፡፡
#ባንኮች
#የባንኮች_ማህበር
@PatternFin
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