Close
February 11 2026
| Regulatory Amendment | Legal/Operational Effect |
| Forward Foreign Exchange Contracts Authorized | Authorized Dealers (Banks) are now expressly permitted to offer forward foreign exchange contracts to their customers (in addition to traditional spot transactions). This represents the removal of the prior prohibition (or requirement of case-by-case NBE approval) on forward currency deals. Businesses can thus enter into forward contracts to lock in future exchange rates for hedging purposes, mitigating foreign exchange risk on future payments. |
| 100% Indefinite Retention of Service Export Proceeds | Service exporters (e.g. in tourism, consulting, IT, aviation, and other service sectors) are now allowed to retain 100% of their foreign exchange earnings in designated retention accounts indefinitely. This amends the earlier rules that required partial surrender or time-bound conversion of export proceeds, removing previous constraints on the duration or amount of forex that service providers may hold. Exporters of services consequently have full ongoing access to their foreign currency funds. |
| Relaxation of Foreign Currency Account Rules | The Directive eases foreign currency (FX) account regulations for investors and streamlines certain approval processes for banks. Foreign investors, diplomatic missions, and international organizations may now open and maintain FX bank accounts in Ethiopia without prior NBE approval, upon submission of required investment documents. The minimum initial deposit requirement (previously USD 100 for Ethiopian nationals) for opening a foreign currency account has been eliminated. Moreover, commercial banks are authorized to approve foreign investors’ profit and dividend remittances and to process external loans and supplier’s credits without separate NBE approval, provided that all regulatory conditions and reporting requirements are satisfied. These changes reduce administrative hurdles for banks and their clients and expedite routine foreign exchange transactions. |
| Outbound Investments & Foreign Loan Guarantees | The 2026 Directive provides that outbound investments by resident Ethiopian entities may be permitted on a case-by-case basis, subject to prior NBE approval. This marks a departure from the previous blanket prohibition on most overseas investments by local entities. In addition, domestic banks are now allowed to issue guarantees for foreign-currency loans obtained by local private sector borrowers, up to a limit of 10% of the bank’s capital. This delegation of authority to banks in providing cross-border loan guarantees (within capped limits) is intended to facilitate access to external financing for Ethiopian companies while maintaining prudential limits on banks’ exposures. |
