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UPDATE 1-Ethiopia's forex reserves rise 30 pct after falling to 'alarming' levels -PM

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ADDIS ABABA, Oct 18 (Reuters) - Ethiopia’s foreign exchange reserves have risen by almost a third in recent months after dropping to alarming levels, Prime Minister Abiy Ahmed said on Thursday.

The reserves were boosted by increased remittances after a government campaign to encourage Ethiopians abroad to send cash home and by a $1 billion dollar deposit by the United Arab Emirates to the central bank’s coffers.

“Some months ago the forex reserve of the country was alarming. However, it has increased by 30 percent and reached to a moderate level,” Abiy told lawmakers in parliament. He gave no figures.

Businesses that need hard currency to import raw materials complained that the unpredictability of the central bank’s foreign currency allocation system has forced some to lay off staff or even shut down completely.

The central bank devalued the birr currency by 15 percent last October for the first time in seven years in an attempt to boost exports.

Abiy, who has launched a string of economic, political and diplomatic reforms since taking power in April, said the country had also faced debt repayment pressure this year. (Writing by Duncan Miriri Editing by Matthew Mpoke Bigg)

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