Ethiopia has removed the limit on how much commercial banks can grow their lending each year, ending one of its most significant post reform banking controls while tightening other monetary measures to keep inflation in check.

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According to Birr Metrics, the National Bank of Ethiopia (NBE) announced on Monday that it had abolished the annual credit growth ceiling for commercial banks, saying the country had reached a stage where it could rely on interest rates and other market based tools, rather than direct lending restrictions, to steer the economy.

The decision followed the seventh regular meeting of the Monetary Policy Committee and was approved by the central bank’s Board of Directors.

The credit cap, introduced in 2024, restricted how quickly individual banks could expand their loan books. It was designed as a temporary measure to slow money supply growth and help curb inflation during a period of major

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