Regulatory Alerts2023-04-25
Added · Updated
Transparency in Foreign Currency Allocation and Foreign Exchange Management (as Amended) Directives No. FXD/67/2020
The National Bank of Ethiopia mandates that banks allocate at least 50% of their total foreign currency for imports to priority sectors, with specific distribution ratios of 10% for first priority, 45% for second priority, and 45% for third priority. Banks must surrender any unallocated difference to the National Bank within five working days of the following month or every six months if utilization remains below the threshold. The directives prohibit banks from allocating exporter foreign exchange to import business outside specified procedures, require a minimum 30% cash upfront for Letters of Credit, and ban registering more than two proforma invoices per application. Non-compliant banks face a fine of USD 5,000 per violation, while importers failing to comply may be blacklisted for six months to two years.