Addis Ababa — The National Bank of Ethiopia (NBE) has issued a comprehensive new directive aimed at strengthening the regulation, transparency and efficiency of the country’s foreign exchange market, according to an official notice released by the central bank.
The directive, which comes into effect this month, outlines detailed rules governing foreign exchange transactions, market participation, compliance requirements and enforcement mechanisms. It is part of the central bank’s broader effort to modernise Ethiopia’s financial system and ensure macroeconomic stability amid ongoing economic reforms.
Under the new regulation, banks and authorised foreign exchange dealers are required to strictly adhere to updated operational standards, reporting obligations and transaction limits. The directive introduces clearer rules on foreign currency purchases and sales, documentation requirements, customer due diligence and the proper use of foreign exchange for approved purposes.
The National Bank has also set out measures to curb illegal foreign exchange practices and market distortions. These include tighter supervision, enhanced monitoring systems and graduated penalties for non-compliance. Sanctions range from administrative warnings and monetary fines to suspension or revocation of licences, depending on the severity of violations.
In addition, the directive provides clearer guidance on priority sectors eligible for foreign exchange allocation, reflecting the government’s focus on supporting productive sectors, essential imports and strategic national interests. Financial institutions are required to ensure that foreign currency allocations are aligned with these priorities and are supported by verifiable documentation.
The NBE noted that the directive was issued in line with its legal mandate to regulate the financial system and safeguard the stability of the national economy. The central bank emphasised that effective implementation will depend on the cooperation of financial institutions, businesses and the wider public.
The directive, identified as FXD/04/2026, is publicly accessible through the National Bank of Ethiopia’s official website and includes a digital verification mechanism to ensure authenticity.
Observers say the new rules mark another step in Ethiopia’s ongoing financial sector reforms, as authorities seek to improve foreign exchange management, enhance confidence in the banking system and reduce parallel market activities.
The National Bank has called on all stakeholders to familiarise themselves with the provisions of the directive and to comply fully with its requirements to support the country’s economic reform agenda.
