AmendmentTrade

FXD/04/2026 – AMENDMENT TO FOREIGN EXCHANGE DIRECTIVE NO. FXD/01/2024

National Bank of EthiopiaFXD/04/2026

Summary

This directive amends Foreign Exchange Directive No. FXD/01/2024 to relax foreign exchange administration, enhance market development, and boost business confidence by modifying rules for foreign currency accounts, forward exchange dealings, outbound investments, and foreign guarantees.

Who's affected

Banks, foreign companies, service exporters, and individuals engaging in foreign exchange transactions, including those dealing with foreign currency accounts, forward exchange, outward investments, and remittances.

Action required

Review and comply with the updated regulations regarding foreign exchange transactions, account openings, outward investments, and remittance procedures as detailed in the amended directive.

Key points

14
  • Amendments to Foreign Exchange Directive FXD/01/2024.
  • Relaxation of rules for FX account opening and utilization.
  • Introduction and modification of forward exchange dealings.
    • Show 11 more
    • Facilitation of outward investment and foreign guarantees.
    • Service exporters can retain 100% of export proceeds indefinitely.
    • Removal of minimum amount for FX account opening.
    • Removal of cash declaration requirement for amounts over USD 10,000.
    • Banks can issue international cards to FX account holders.
    • Foreign companies can open FX accounts without NBE approval.
    • Banks can approve investor profit/dividend remittances.
    • Banks handle external loans and suppliers' credit without NBE approval.
    • Forex bureaus have relaxed security deposit requirements and cash holding limits.
    • Increased flexibility for advance export payments and service payments (medical/educational).
    • Outward investment and individual remittances are now permitted under specific conditions.

Requirements

18
  • Foreign Companies (FDI) can open FX accounts upon presenting an application letter, Foreign Investment License, and TIN Certificate without NBE approval.
  • Banks can open FX accounts for profit-making institutions with specific foreign currency sources (grants/gifts, etc., excluding export proceeds).
  • Minimum amount for FX account opening has been removed.
    • Show 15 more
    • Cash notes declaration requirement for amounts exceeding USD 10,000 or equivalent is removed for authorized dealers.
    • FX account holders can use funds for self, spouse, and children's foreign service payments abroad with valid documents and invoices.
    • Account holders can use funds for self, spouse, and children's foreign service payments abroad (in addition to Article 6 utilization) with valid documents and invoices.
    • Banks are authorized to approve Investor profits or dividends remittances abroad, requiring customer undertaking and monthly reporting to NBE.
    • Banks handle external loans and suppliers’ credit approvals/repayments without NBE approval, adhering to directive requirements and requiring customer undertaking on debt-equity ratio, with monthly reporting to NBE.
    • Customs declaration requirement for foreign currency exceeding USD 10,000 or equivalent for forex bureaus, FX account deposits, and border entry is removed.
    • Exporters can obtain permits for foreign currency sent from abroad as advance payment if parties present an agreement specifying the sender's role and exporter's acceptance, presented to banks.
    • Foreign currency receipts can be advance payment for future export if marked as 'Advance payment for future export/import' or if the commodity type, invoice, or contract number is stated.
    • Banks can allow service payments up to USD 20,000 or equivalent per case for medical and educational services as advance payment without visa/ticket requirements, based on foreign entity's proof and customer application.
    • Forex bureaus can provide foreign currency cash notes for local Visa, immigration, and license fees upon presentation of payment evidence.
    • Independent Forex Bureaus (IFBs) security deposit of Birr 30 million is released after one year of operation; half (Birr 15 million) released after half a year.
    • FX cash holding limit for IFBs is 25% of paid-up capital; excess must be sold to banks within five working days.
    • Import applications are valid for 120 calendar days from issue, extendable by the authorized bank for good cause.
    • Ethiopian entities can invest outward on a case-by-case basis upon NBE approval.
    • Resident Ethiopians can transfer up to USD 3,000 or equivalent abroad for subsistence family support upon justification.

Rights and permissions

19
  • Transacting parties are free to choose between spot and forward exchange rates for FX transactions.
  • Service exporters are entitled to hold 100% of their export proceeds in an FX retention account indefinitely.
  • Banks are allowed to issue internationally recognized cards for all foreign currency account holders and load foreign currency as per instruction, without visa and ticket requirements.
    • Show 16 more
    • Foreign Companies (FDI) can open FX accounts.
    • Profit-making institutions can open FX accounts under specific conditions.
    • FX account holders can use funds for personal foreign service payments abroad.
    • Account holders may use funds for spouse and children's foreign service payments abroad.
    • Banks are authorized to approve remittance of investor profits or dividends.
    • Companies can remit net profit/dividend abroad as per requirements and customer undertaking.
    • Banks handle external loans and suppliers' credit approvals and repayments.
    • Banks are entitled to offer private foreign exchange loan guarantees up to 10% of total capital.
    • Exporters are entitled to obtain permits for foreign currency sent from abroad as advance payment.
    • Foreign currency receipts can be considered advance payment for future export.
    • Banks are authorized to allow service payments for medical and educational services as advance payment.
    • Forex bureaus are entitled to provide foreign currency cash notes for specific local fees.
    • Independent Forex Bureaus (IFBs) security deposit is released under specified conditions.
    • Import applications may be extended for good cause.
    • Outward investment by Ethiopian entities is allowed.
    • Resident Ethiopians are entitled to transfer foreign currency for subsistence family support.

Restrictions

8
  • Banks must report outward investor profit/dividend remittances to NBE monthly.
  • Companies must sign an undertaking letter for external loans/suppliers' credit indicating compliance with NBE's debt-equity ratio directive.
  • Banks must report external loan and suppliers' credit transactions to NBE monthly.
    • Show 5 more
    • Private foreign exchange loan guarantees offered by banks cannot exceed 10% of the bank's total capital.
    • A foreign exchange loan guarantee is considered a loan and governed by the single borrower limit directive.
    • Excess FX cash holding by Independent Forex Bureaus must be sold to banks within five working days from the end of the calendar month.
    • Outward investment by Ethiopian entities requires NBE approval.
    • Outward remittances for subsistence family support require justification of the case(s).

Penalties

1
  • No specific penalties are mentioned in this directive.

Objectives

6
  • To relax foreign exchange administration for ease of doing business.
  • To enhance foreign exchange market development.
  • To enhance the business community’s confidence in the FX reform.
    • Show 3 more
    • To incentivize foreign account holders and boost the country’s foreign currency earnings.
    • To help manage exchange rate fluctuation risk and encourage smoothing international trade.
    • To boost foreign exchange earnings and business confidence through outward investment and relaxed foreign guarantee provisions.

Organizations

3
  • National Bank of Ethiopia (NBE)
  • Authorized Dealers
  • Independent Forex Bureaus (IFBs)

Legal references

4
  • National Bank of Ethiopia Establishment (Amended) Proclamation No. 1359/2025, Article 6 (2) and (17)
  • National Bank of Ethiopia Establishment (Amended) Proclamation No. 1359/2025, Article 39
  • Foreign Exchange Directive No. FXD/01/2024
    • Show 1 more
    • Single Borrower Limit Directive
Original sourcehttps://nbe.gov.et/files/fxd-04-2026/
View source