In a policy shift aimed at enhancing foreign currency flexibility for exporters, the National Bank of Ethiopia (NBE) announced that exporters would be allowed to retain 50 percent of the foreign currency they generate indefinitely. Under this new system, exporters can sell half of their foreign currency earnings immediately and hold the remaining half in their accounts in Ethiopia without time restrictions.

Previously, exporters were required to sell 50 percent of their foreign currency earnings immediately to banks and were obligated to sell the remaining half within a month.

“This new policy will provide exporters with the freedom to manage half of their earnings on their terms, eliminating the month-long selling deadline,” Mamo Mehretu said. “This move reflects our commitment to supporting exporters by allowing them more control over their foreign currency.”

Since the implementation of the macroeconomic reforms, the National Bank’s foreign currency reserves have surged to USD 3.4 billion from a previous USD 1.4 billion. According to Mehretu, these reforms—part of a broader policy overhaul aimed at modernizing monetary policy and creating a stable, market-driven exchange rate system—have helped resolve a longstanding foreign currency shortage that Ethiopia faced in recent years.

The government’s macroeconomic reforms, which include overhauling foreign exchange management, have allowed the foreign exchange rate to be determined by the market rather than through direct government intervention.

Source: Ethiopian News Agency