The National Bank of Ethiopia (NBE) has issued a public notice announcing a series of significant relaxations to Ethiopia’s foreign exchange directives, in a move aimed at strengthening the foreign exchange market and easing current account restrictions.
In its statement issued yesterday, the central bank said the measures form part of the broader macroeconomic reform launched in July 2024 and are intended to further modernize Ethiopia’s foreign exchange regulatory framework.
Among the key changes, the NBE announced that service exporters will now be allowed to retain 100 percent of their export proceeds in foreign exchange retention accounts for an indefinite period. The Bank also authorized commercial banks to issue internationally recognized payment cards for foreign exchange account holders, enabling outbound retail payments including e-commerce transactions, provided sufficient foreign currency is available in the account.
The directive further permits foreign exchange account holders, including retention account holders, to use their accounts to cover education, medical, and travel expenses abroad for their spouses and children upon presentation of valid documentation.
In another major shift, profit-making institutions are now allowed to open current, savings, and time deposit foreign exchange accounts as long as the foreign currency is sourced from abroad through grants, gifts, or other eligible sources. Additionally, the Bank removed the previous minimum requirement of USD 100 to open a foreign exchange savings account for both resident and non-resident Ethiopians, including foreign nationals of Ethiopian origin.
The NBE also disclosed that outbound investment by Ethiopians has been permitted, subject to case-by-case approval by the central bank. Furthermore, residents entering Ethiopia with foreign currency will now be able to exchange the funds at authorized forex bureaus or deposit them into their foreign currency accounts without presenting a customs declaration.
Regarding remittances, the Bank stated that Ethiopians are allowed to remit up to USD 3,000 for family support, subject to the provision of relevant documents. Authorized banks have also been permitted to enter into forward exchange transactions without requiring prior approval from the NBE.
The public notice also includes measures aimed at easing foreign exchange access for foreign direct investment companies, embassies, international organizations, and NGOs, which will now be allowed to open foreign exchange accounts at authorized banks without requiring an approval letter from the NBE.
In addition, the NBE confirmed that authorized banks are now allowed to handle approvals of external loans and suppliers’ credit in accordance with the foreign exchange directive requirements. Exporters will also be permitted to receive advance payments for future exports, provided proper documentation is presented to banks.
The central bank further stated that authorized banks can offer private external loan guarantees of up to 10 percent of their total capital. It also introduced a new provision allowing authorized banks to make advance payments of up to USD 20,000 per case for medical and education services without visa and ticket requirements, based on appropriate proof and customer application.
In a move aimed at supporting independent foreign exchange bureaus, the NBE announced it will release Birr 30 million to those bureaus that have been operational for one year or more, and Birr 15 million to those that have been operational for at least six months. The Bank also raised the cash holding limit of independent forex bureaus from 10 percent to 25 percent of their capital, requiring excess holdings to be sold to commercial banks.
The NBE also stated that forex bureaus will now be allowed to provide cash foreign exchange sales for local payments such as visa fees, immigration fees, and license fees, subject to presentation of payment evidence.
The latest reforms are expected to improve foreign exchange accessibility, enhance financial sector efficiency, and support Ethiopia’s efforts to build a more competitive and market-responsive economy.
Source: NBE
