The National Bank of Ethiopia NBE implemented significant reforms to its foreign currency exchange management system. The new approach shifts to a market-based model, allowing banks and their customers to negotiate exchange rates. In this framework, the National Bank focuses on stabilizing the market instead of directly controlling exchange rates.
The National Bank of Ethiopia has announced that it is now accepting applications for work permits to establish private foreign exchange offices. According to the bank’s press release, the NBE invites individuals interested in opening a private foreign exchange office to submit their applications.
Ethiopian citizens, whether residing in the country or abroad, as well as those with dual citizenship, can open a foreign exchange office if they meet the necessary requirements and obtain permission from the National Bank.
The required capital details shared by NBE to set up a foreign exchange office are a minimum of Birr 15 million and the ability to provide a security deposit of Birr 30 million to be placed in a blocked account (which can be interest-earning) at any bank. And the face value of the security deposit shall be released after two years of continued service by the Independent Forex Bureau.
So, the establishment of private foreign exchange offices is expected to enhance and broaden the foreign exchange market, addressing the needs of customers looking to buy or sell foreign currency for cash.
Moreover, the Governor of the National Bank of Ethiopia, Mr. Mamo Mihretu, said, “The fact that we have given a work permit to open private foreign exchange offices is to open the Ethiopian finance sector for foreign investment and to make the sector equal and competitive with the world’s best practices and practices in the coming years and the decision that the National Bank has started to achieve the strategic change that he has started.”
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