Addis Ababa, Dec 18 (NationPress) The Ethiopian House of Peoples' Representatives (HoPR), which serves as the lower house of parliament, has officially passed a bill that permits foreign banks to establish operations in the nation.

During its regular session on Tuesday, the HoPR conducted a review and subsequently approved the Banking Business Proclamation, representing a pivotal advancement towards opening Ethiopia's banking sector to foreign investment, as reported by the state-affiliated Fana Broadcasting Corporate.

The proclamation was adopted following a majority vote and aligns with the Ethiopian government's previous policy decisions aimed at liberalizing the financial sector. This initiative is anticipated to draw in foreign banks and investors, facilitating the influx of vital capital into the economy of this East African nation.

Mamo Mihretu, the governor of the National Bank of Ethiopia (NBE), remarked that the newly sanctioned proclamation is designed to uphold the stability of the Ethiopian economy, emphasizing that the bill has clearly outlined the NBE's core objectives, which include maintaining price stability and nurturing a strong financial system.

Traditionally, Ethiopia's banking sector has remained inaccessible to foreign banking institutions, as noted by the Xinhua news agency.

This development signifies the conclusion of decades of exclusivity enjoyed by local financial entities, thereby opening doors for foreign competition and innovation.

Since assuming office in 2018, Prime Minister Abiy Ahmed has consistently promoted the liberalization of the financial sector as part of a broader strategy for economic reform aimed at attracting foreign investment and fostering economic growth.

Recently, Ethiopia also floated its foreign exchange, marking another significant shift away from the central bank's previously strict regulatory interventions.