AMN-PLUS-May 25, 2026
The National Bank of Ethiopia (NBE) has announced new measures to ease foreign exchange procedures and reduce trade finance costs as part of the countryβs ongoing transition to a market-based foreign exchange system.
In a public notice issued on May 25, the NBE said it had amended parts of its foreign exchange directive to reduce administrative bottlenecks and improve the ease of doing business for importers and exporters.
Under the revised rules, commercial banks are now allowed to approve Letters of Credit (LCs) and Cash against Documents (CAD) transactions for businesses holding foreign currency accounts and retention accounts without prior approval from the NBE.
The changes also allow businesses with foreign currency accounts, including retention account holders, to initiate shipments of goods under CAD arrangements without prior approval from banks. Payments will still be processed only after the required trade documents are submitted and verified.
The NBE said the reforms are part of broader efforts launched following the introduction of a market-based foreign exchange regime in July 2024. According to the bank, the measures are intended to strengthen the efficiency, transparency and competitiveness of Ethiopiaβs foreign exchange market while aligning it with international standards.
The notice also introduced new rules governing fees charged on Letter of Credit transactions.
According to the NBE, fees and charges imposed by commercial banks on LC transactions have not been consistent with prevailing international practices. The bank said fees will now be calculated on an annualized basis and applied proportionally according to the duration, or tenor, of each LC arrangement.
The NBE further instructed banks not to charge above the maximum fee limits already set by the regulator.
The bank said the revised fee structure is expected to lower transaction costs for importers and exporters, improve the competitiveness of Ethiopiaβs trade finance system and support ongoing foreign exchange reforms.
The NBE added that it would continue monitoring developments in the foreign exchange market and take additional measures when necessary to maintain a stable and efficient market, according to national bank of Ethiopia.
