National Bank of Ethiopia Announces New Foreign Exchange Market Reforms to Boost Flexibility and Transparency
May 2025, By BanksEthiopia Team
In a significant move, the National Bank of Ethiopia (NBE) has made public a new set of reforms to further improve the functioning of the foreign exchange market. Effective from May 20, 2025, the changes will start. It is expected to improve foreign currency accessibility for importers and travellers, promote transparency in bank fees, and stimulate further economic growth.
Major Updates to Ethiopia’s Foreign Exchange Policy
The latest reforms are part of an initiative that began in July 2024 with the launch of a new foreign exchange system. According to the National Bank of Ethiopia, the initial changes have all garnered notable benefits, Such as a 100% increase in goods exports, strong growth in services and remittances, Improved capital inflows and Record-high foreign exchange reserves at both commercial banks and the National Bank of Ethiopia (NBE).
With this momentum, the National Bank of Ethiopia’s latest measures will aim to enhance market flexibility and efficiency. The key elements of the reform are as follows:
1. Increment of Import Advance Payment Limits
To alleviate restrictions faced by importers, the National Bank of Ethiopia NBE is raising the import advance limit from 5,000 USD to 50,000 USD per import transaction. This change comes from global best practices and allows businesses to make more efficient payments to foreign suppliers.
2. Higher Forex Limits for Travellers: To provide further flexibility to travellers
The foreign currency purchase limit for outbound travellers has been increased:
- Up to $10,000 for personal travel
- Up to $15,000 for business travel
The customer is also allowed to take the money in cash form or via debit card. Additionally, Ethiopians who have foreign exchange accounts, doubling the previous limit of 10%, can now use up to 20% of their forex balance via debit card transactions.
3. Rationalisation and simplification of bank FX fees
The National Bank of Ethiopia NBE is advising Ethiopian banks to ensure competitive, transparent, and simplified pricing for their forex services. Accordingly, effective May 26, 2025, all bank fees related to the purchase of foreign exchange for the import of goods, service payments, or cash note purchases shall not exceed 4%.
To ensure foreign exchange fees are transparent and simplified for consumers. The National Bank of Ethiopia is instructing banks to avoid the addition of various supplementary charges for minor associated services. Finally, starting from June 2025, banks must publicly disclose their foreign exchange fees on the National Bank of Ethiopia’s official website.
The above reforms, by improving access to foreign currency, simplifying fee structures, and modernising regulations, are expected to support import activity, facilitate international travel, and encourage investment and economic expansion.
Stay connected to Banks Ethiopia for more updates on financial reforms, banking policies, and forex market developments in Ethiopia.
Source: nbe.gov.et