Taking a bold move the National Bank of Ethiopia (NBE), the central bank in charge of regulating the financial system of the country, removes on Wednesday most of decades old restrictions on access to foreign currency (forex) including repatriations of profits by foreign companies without NBE approval.
“Investors who want to repatriate their dividends are entitled to remit net profit/dividend abroad on condition that the necessary documents in the directive are submitted to banks and commercial banks ensure that all the necessary documents are fulfilled as per the directive without requesting for NBE’s approval,” NBE said.
Unlike, the previous conditional access rights, now any Ethiopian national is allowed to fully utilize the forex it generates for online purchases, foreign education and medical purposes for his family without approval by NBE.
“Any service exporter is allowed to hold one hundred percent (100%) of its export proceeds in foreign exchange retention account for indefinite periods… Authorized banks are allowed to pay foreign exchange not exceeding USD twenty thousand (USD 20,000) or other equivalent currencies, per case for medical and education services as an advance payment without visa and ticket requirements, based on foreign entity’s proof of letter and application of the customer,” NBE stated.
One can also transfer up to $3,000 to his or her relative abroad without NBE’s approval, according to the new NBE forex directive notice. “Outbound remittance is allowed for Ethiopians not higher than USD three thousand (USD 3,000) for foreign exchange account holders and non-foreign exchange account holder Ethiopians for their family upon the provision of relevant documents.”
For the first time Ethiopian’s are also allowed to legally move money out of the country to invest abroad. “Outbound investment by Ethiopians has been allowed, subject to case-by-case approval by NBE,” the new NBE notice says.
The NBE notice of forex directive also stated the increase of cash holding of independent forex bureaus from 10% to 25%. “The cash holding limit of Independent Foreign Exchange Bureaus has been increased to 25 percent from the current 10 percent of their capital and any excess holding has to be sold to commercial banks.
