Saturday, June 22, 2024
NewsThe National Bank of Ethiopia doubles forex retention limit for exporters

The National Bank of Ethiopia doubles forex retention limit for exporters

The National Bank of Ethiopia (NBE) has decided to double the percentage of foreign currency that Ethiopian exporters can retain from their export earnings.

As per the existing regulation, exporters were required to surrender 70 percent of their foreign currency earnings to the central bank at the prevailing exchange rate.

They were only allowed to retain 20 percent of the earnings. The remaining 10 percent had to be surrendered to commercial banks.

However, in a decision passed today, the NBE has doubled the retention limit for exporters to 40 percent of their foreign exchange proceeds.

Now, exporters will have to surrender only 50 percent of the forex earnings to the central bank. The 10 percent share for commercial banks remains unchanged.

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Frezer Ayalew, the Director of Banking Supervision at the National Bank of Ethiopia (NBE), confirmed the decision has been made “but it will take effect once a circular has been issued to banks.”

The move aims to incentivize exporters and boost Ethiopia’s export competitiveness in international markets. The NBE believes the relaxed norm will promote higher exports.

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