The National Bank of Ethiopia (NBE) has announced decisive measures to combat illegal foreign exchange activities. This move reflects the bank’s commitment to reforming the financial sector. With recent investigations and new regulations, the NBE aims to create a transparent and effective foreign exchange market.
The NBE has warned financial institutions and businesses involved in illegal foreign exchange activities. Governor Mamo Mihretu emphasized that the bank conducted thorough on-site investigations into various banks’ currency handling practices. The investigations revealed that some banks engaged in “unhealthy activities.” As a result, the NBE will take legal action against any officials found guilty of misconduct.
Governor Mamo Mihretu stated, “We will take legal action based on the investigation report that is now completed and submitted for a decision.” This proactive approach shows the NBE’s determination to eliminate corruption and restore public trust in financial institutions.
The NBE’s reforms are already yielding positive results. In an interview, Governor Mamo Mihretu reported increased foreign exchange reserves. These changes have also facilitated smoother transactions for businesses operating in Ethiopia. Introducing a free foreign exchange market allows citizens to open foreign exchange accounts and has led to new forex bureaus, enhancing accessibility.
Governor Mamo Mihretu noted that the previous system was outdated and vulnerable to exploitation. The new guidelines streamline operations while ensuring compliance with regulations like the “Know Your Customer” (KYC) principle. This principle is crucial for preventing money laundering and other illegal financial activities.
To further curb illegal forex trading, the government has allowed unofficial currency exchange operators to establish legal offices. This initiative aims to integrate these players into the formal economy. It provides opportunities while discouraging illicit practices. Governor Mamo Mihretu warned that companies trying to revert to past illegal methods will face severe penalties, stating, “Those who attempt to access foreign currency through illegal means jeopardize their businesses.”
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