FORTUNE+ VIDEO SPONSORED CONTENTS ADVERTORIALS FORTUNE AUDIO Fortune Careers TRADE AFRICA Election 2026 New TIME REMAINING UNTIL ETHIOPIA’S NATIONAL ELECTION 0Days 0Hours 0Minutes 0Seconds

Fortune Logo

Central Bank Grants Forex Bureau Permits to Five Non-Bank Operators

Oct 2 , 2024

The National Bank of Ethiopia (NBE) has granted licenses to five private non-bank entities to operate in the foreign exchange market, in a groundbreaking move to liberalise a tightly regulated forex regime. This marks the first time such permissions have been extended beyond traditional banks, a potential turning point in addressing the acute foreign currency shortage.

The newly licensed operators - Dugda Fidelity Investment Plc, Ethio Independent Foreign Exchange Bureau, Global Independent Foreign Exchange Bureau, Robust Independent Foreign Exchange Bureau, and Yoga Forex Bureau - are expected to commence operations within a month. According to a statement released by the NBE today, these entities will offer services from spot transactions to various commercial forex activities.

The central bank's decision follows the latest directive issued this year governing non-bank entities in the forex market. These bureaus are permitted to handle up to 10pc of the daily forex auction limit set by the central bank, a cautious yet historical step toward opening up the market while maintaining regulatory oversight.

Ethiopia has been gripped by severe foreign currency depreciation and a chronic shortage of foreign exchange, issues that have impacted economic growth and inflated import bills. By allowing private non-bank entities into the forex market, the NBE aims to alleviate pressure on the Birr and provide more competitive rates for consumers.

According to market analysts, the introduction of non-bank players could reduce the parallel foreign exchange market, where rates have soared to unprecedented levels due to high demand and scarce supply.

The licenses are issued during heightened scrutiny over Ethiopia's foreign exchange reserves, which have sharply declined in recent years due to low export revenues and rising import bills. International financial institutions like the World Bank and the International Monetary Fund (IMF) have urged the federal government to implement reforms to beef up currency stability, including liberalising the forex market.

As these non-bank entities prepare to launch their operations, all eyes will be on the initial market response and the NBE's subsequent steps in managing the forex crunch. The move could either disrupt the status quo by injecting much-needed liquidity into the market or serve as a temporary measure in a system requiring deeper structural reforms.

Stringent capital requirements and potential pushback from established banks could affect the new entrants. They would also contend with a volatile macroeconomic environment and regulatory unpredictability that has characterised the financial sector.

Put your comments here

N.B: A submit button will appear once you fill out all the required fields.



Related Posts

Share This Post
Linkedin
Google+


Most read

Latest News

Editor's pick

Commentaries

The Geopolitical Battle Over Monetary Infrastructure

The development of payment infrastructure in emerging-market economies (EMEs), from i...

Making Roads Pathways of Progress, Not Corridors of Grief

For decades, Ethiopia's roads have been described through the language of fate. The d...

Fineline

Leaders of the National . . .

Leaders of the National Election Board are in a charm offensive mood, of a sort. Last week, they organised a rare tour for members of the me...

When the country’s most. . .

When the country's most senior diplomats and envoys return back to their posts after two-week debriefings, they leave behind a point or two...

Editorial

Every Encounter with the State Should Not Become an Invoice

May 9 , 2026

The Ethiopian state appears to have discovered a fiscal instrument that is politicall...

National Dialogue Has Everything But the Trust It Needs

May 2 , 2026

By the time Ethiopia's National Dialogue Commission (ENDC) reached the end of its fir...

Addis Abeba's Roads Reveal a Country Where the Powerful Drive Through the Law

Apr 25 , 2026

In a political community, official speeches show what governments want their citizens...

Ethiopia's New Diplomacy Essence Could Be About Shielding Sovereignty

For much of the past three decades, Ethiopia occupied a familiar place in the Western...

Gallery

Parliament Approves New Cabinet Members

Oct 6 , 2021

Parliament Approves New Cabinet, Incorporates Opposition Leaders Lawmakers have approved today the nominations of 22 ministers, including three opposition leaders. Two MPs have voted against, while 12 abstained...

2020 in Posterity

Jan 5 , 2021

TIGRAY VOTES DESPITE "NULL & VOID" THREAT

Sep 9 , 2020

IN-PICTURE: LAUREATE'S RECEPTION  

Dec 14 , 2019

PM Abiy Ahmed (PhD) at a Gala Dinner Called for the Awarding of the Félix Houphouët-Boigny Peace Prize

May 6 , 2019

Faces, Voices of Addis Abeba

Apr 26 , 2019

Sunday With Eden

The Silence That Leadership Can't Keep

A few days ago, I attended a virtual conference in Canada that stayed with me, not be...

Development That Redraws the Rent Line

Urban renewal is often sold as a promise: cleaner streets, safer neighbourhoods, bett...

Life Matters

Motivation Drops as the Day Begins in Sleepwear

We have all seen the aesthetic. The “work from home” dream usually comes packaged...

The Final Exam No One Prepared For

The first time I heard about the “Mesob” one-stop service initiative, relief came quickly. It sounded like a promise to citizens worn do...