Regulatory Alerts2025-11-07
Foreign Exchange Exposure Limits of Banks Directive No. SBB/96/2025
The National Bank of Ethiopia issued Directive No. SBB/96/2025 to cap banks' overall foreign exchange open positions at plus or minus 18 percent of their Tier 1 capital. The regulation mandates consolidated risk computation using the shorthand method, continuous intra-day monitoring, and daily reporting of single-currency and overall exposures. Non-compliant institutions face automatic financial fines, daily reporting penalties, and potential operational restrictions, effectively replacing the previous 2001 framework to strengthen exchange rate risk management.
Share