The National Bank of Ethiopia (NBE) has announced the commencement of accepting applications for Independent Foreign Exchange Bureaus. This move follows the recent approval of the Foreign Exchange Directive (FXD/01/2024), which took effect on July 29, 2024.
Independent Forex Bureaus are authorized to engage exclusively in the buying and selling of foreign currency cash notes, operating on a basis of freely negotiated exchange rates with their customers. Eligible business entities must be owned by Ethiopian nationals, Non-Resident Ethiopians, or Foreign Citizens of Ethiopian Origin. The capital requirement for obtaining an Independent Forex Bureau license is set at Birr 15 million, with an additional Security Deposit of Birr 30 million required to be placed in a blocked, interest-earning account at any bank. The Security Deposit is to be released after two years of continuous service.
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NBE Governor Mamo Mihretu highlighted the significance of this development, stating, “With the licensing of Independent FX Bureaus, we are marking yet another important milestone in opening up Ethiopia’s financial sector, and also bringing it in line with global norms and best practices.” He added that the introduction of these bureaus is a crucial part of NBE’s Strategy Plan, aiming to transform the size, shape, and scope of Ethiopia’s financial sector.
Operators of Independent Forex Bureaus must adhere to strict conditions, including maintaining suitable premises that meet safety and security standards, ensuring staff integrity and competence, and securing adequate insurance coverage for maximum cash holdings. These bureaus will operate independently of bank affiliations and are expected to play a vital role in deepening Ethiopia’s foreign exchange market and contributing to the ongoing market determination of the exchange rate.
