The National Bank of Ethiopia has announced that it has completed the process of granting permission to Foreign Exchange Offices, a move that comes in the wake of Ethiopia’s decision to float its currency, the Birr.
The National Bank of Ethiopia also announced that it is now accepting more individuals and companies, allowing entities previously involved in foreign exchange informally to be legally licensed. This decision aligns with the country’s recent economic reforms, which include the floating of the Birr, a measure intended to stabilize the currency and attract more foreign investment.
Previously, only banks were allowed to participate in the foreign exchange market. However, with the new reforms, other parties who wish to engage in the sector are now permitted to do so, which is expected to increase competition and improve access to foreign currency.
The bank’s Deputy Director of Foreign Exchange Monitoring and Reserve Management, Ato Ababahehu Dufera, stated, “We have accepted those who have shown interest in opening foreign exchange accounts,” adding that this measure is part of a broader strategy to manage the implications of the floating currency by widening access to foreign exchange services.
In light of the floating of the Birr, foreign citizens living in Ethiopia are now allowed to open accounts and use them exclusively for converting foreign currency into Birr. This is seen as a crucial step in managing foreign currency reserves and ensuring smoother currency operations during the transition period.
Ababahehu Dufera also noted that any individual who earns foreign currency in the country can open a foreign currency account with a minimum deposit of 100 dollars. He emphasized that this initiative will not only benefit individuals by providing them with greater flexibility in managing their finances but will also support the national economy by stabilizing foreign currency reserves during the ongoing currency float.
This new policy is expected to play a significant role in helping Ethiopia navigate the challenges and opportunities presented by the recent floatation of the Birr, ensuring a more robust and competitive foreign exchange market in the country.
