ADDIS ABABA — The National Bank of Ethiopia (NBE) announced on Thursday that it has started accepting applications for Independent Foreign Exchange Bureaus under the newly approved Foreign Exchange Directive (FXD/01/2024), which became effective on July 29, 2024. This move is part of the central bank’s efforts to deepen the foreign exchange market in Ethiopia.
According to Ethiopian News Agency, Independent FX Bureaus are authorized to engage in buying and selling foreign currency cash notes and can conduct transactions based on freely negotiated exchange rates with customers. The opportunity to operate an Independent FX Bureau is available to business entities owned by Ethiopian nationals, Non-Resident Ethiopians, or Foreign Citizens of Ethiopian Origin.
The Foreign Exchange Directive outlines the capital and operating requirements for these bureaus. Applicants must meet a minimum capital requirement of Birr 15 million and provide a Security Deposit of Birr 30 million, which must be placed in a blocked account at any bank and can earn interest. These requirements are detailed in Annex 5 of the directive.
The NBE believes that the introduction of Independent FX Bureaus will play a crucial role in enhancing the foreign exchange market by catering to customers who need to buy or sell foreign currency cash notes. Additionally, these bureaus will contribute to the ongoing market determination of exchange rates, as they are authorized to set their buying and selling rates independently from posted bank rates.
NBE Governor Mamo Mihretu emphasized that the launch of FX Bureaus aligns with the bank’s broader strategy to “fundamentally transform the size, shape, and scope of Ethiopia’s financial sector over the coming years.”