The National Bank of Ethiopia (NBE) has taken a significant step toward liberalizing the country's economy by issuing Directive No. FXD/04/2026. This new directive amends the previous FXD/01/2024 to further relax foreign exchange (FX) administration, enhance market development, and boost the confidence of the business community and investors.
Effective February 12, 2026, these changes drastically reduce "red tape" and empower authorized commercial banks to handle transactions that previously required NBE approval.
1. Key Changes for Businesses and Investors
- 100% FX Retention: Service exporters (including tourism, transport, and consulting) are now entitled to keep 100% of their export proceeds in an FX retention account for an indefinite period.
- Simplified Account Opening: Foreign Direct Investment (FDI) companies can now open foreign currency accounts at any authorized bank simply by presenting their investment license and TIN - no NBE approval letter is required.
- Streamlined Dividend Repatriation: Banks are now authorized to approve and remit net profits or dividends abroad for recognized foreign investments without seeking NBE’s permission, provided the bank reports these monthly.
- External Loans & Supplier Credit: Commercial banks now fully handle the approval and repayment of external loans (both cash and in-kind) and suppliers' credit, provided the company meets debt-to-equity ratio requirements.
- Forward Exchange Rates: To manage the risk of fluctuating exchange rates, banks and customers can now agree on forward exchange rates for future settlements instead of relying solely on the current "spot" rate.
- Loan Guarantees: Banks are now permitted to offer private FX loan guarantees up to 10% of their total capital.
2. New Benefits for Individuals and Families
- Support for Families Abroad: Resident Ethiopians can now remit up to USD 3,000 (or equivalent) for subsistence family support abroad upon application.
- Education and Medical Expenses: FX account holders can use their funds to pay for medical, education, and travel expenses for themselves, their spouses, and their children.
- Advance Payments: Banks can authorize advance payments of up to USD 20,000 for medical and educational services without requiring a visa or flight ticket, based simply on a proof of payment request.
- International Cards & E-commerce: Banks may now issue internationally recognized cards (like Visa or Mastercard) to all FX account holders for retail payments and online shopping without requiring a visa or ticket.
- No Minimum Balance: The previous requirement of a USD 100 minimum balance to open an FX savings account has been removed.
3. Updates for Forex Bureaus and Documentation
- Customs Declaration Removal: For amounts exceeding USD 10,000, the requirement to present a customs declaration when entering the country, depositing into an FX account, or exchanging currency at a bureau has been removed.
- Increased Cash Limits: Independent Forex Bureaus (IFBs) can now hold up to 25% of their paid-up capital in cash at the end of each month.
- Liquidity Support: The NBE is releasing security deposits back to bureaus - Birr 30 million for those operational for one year and Birr 15 million for those operational for six months.
- Local FX Payments: Forex bureaus are now authorized to sell FX cash for local payments of Visa fees, immigration fees, and license fees upon presentation of evidence.
Legal Reminder: While these reforms represent a major shift toward a free market, compliance remains vital. Most transactions still require valid contracts, invoices, or relationship documents (for family support) to be presented to your commercial bank.
For a comprehensive review of how these amendments may impact your specific legal or financial standing, we recommend consulting with legal counsel or reviewing the full text of Directive No. FXD/04/2026 on the National Bank of Ethiopia’s website.
Legal Update: National Bank of Ethiopia Relaxes Foreign Exchange Controls — FAQs
How has Ethiopia changed its rules for service exporters holding foreign currency?
Under the new 2026 directive, Ethiopian service exporters (such as those in tourism, IT, and consulting) can now retain 100% of their foreign exchange earnings in their retention accounts indefinitely. This removes the previous requirement to convert a portion of those earnings into Ethiopian Birr.
Can foreign investors in Ethiopia remit dividends without National Bank (NBE) approval?
Yes. Commercial banks in Ethiopia are now authorized to process and remit net profits or dividends for recognized foreign investments directly. Investors no longer need to wait for a specific NBE approval letter, provided they submit the required financial documents to their bank.
What are the new rules for opening a foreign currency account in Ethiopia for FDI companies?
Foreign Direct Investment (FDI) companies, embassies, and international NGOs can now open FX accounts at any authorized Ethiopian bank simply by presenting their investment license and TIN. The previous "red tape" of requiring a separate support letter from the National Bank of Ethiopia has been eliminated.
How much money can Ethiopian residents now send abroad for family support?
Ethiopians are now permitted to remit up to USD 3,000 (or the equivalent in other currencies) for family subsistence support abroad. This can be done through an application at a local bank with relevant supporting documents.
Is a flight ticket required in Ethiopia to pay for overseas medical or education expenses?
No. Banks in Ethiopia can now authorize advance payments of up to USD 20,000 for medical and educational services abroad based only on a proof of payment request or letter from the institution. The requirement to present a visa or flight ticket for these specific payments has been removed.
Can I get a Visa or Mastercard from an Ethiopian bank now?
Yes. The NBE now allows Ethiopian banks to issue internationally recognized cards (like Visa or Mastercard) to any FX account holder. These cards can be used for international retail payments and online shopping (e-commerce) as long as the account has sufficient funds.
What is the minimum balance to open a foreign currency savings account in Ethiopia?
As of February 2026, the NBE has removed the USD 100 minimum balance requirement. Individual banks may now set their own thresholds or allow accounts to be opened with no minimum balance at all.
What new local services can Independent Forex Bureaus provide in Ethiopia?
Independent Forex Bureaus in Ethiopia are now authorized to sell foreign currency cash for specific local payments, including Visa fees, immigration fees, and government license fees, as long as the customer provides proof of the required payment.
Do I need to declare foreign currency at Ethiopian customs if I have more than $10,000?
The requirement to present a customs declaration when depositing or exchanging amounts over USD 10,000 has been removed. You can now deposit these amounts into an FX account or exchange them at a bureau without that specific paperwork.
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