Ethiopian National Bank Amends Foreign Currency Directive

National-Bank-amends-directiveApril 2, 2017 - The National Bank of Ethiopia has slightly changed a directive which was introduced a year ago to regulate allocation of foreign currency exchange (forex) in a transparent manner, according to the Reporter.

The amended directive, like the old one, focuses on allocating forex on first-come, first-serve basis. It repeals the tradition in the banking industry where exporters were allowed to gain better access of forex currency.

The latest directive has modified the way application registration is reported to the national bank. According to the amended directive, each bank shall send the foreign currency application registration and approval detail as per the attached format through a secured email address to the central bank and a copy of pro-forma invoice, weekly.

On the previous directive, which was introduced last year, banks were not required to send pro-forma invoices.

According to a bank CEO, who spoke to The Reporter, the central bank came with the new addition of reporting the invoices in order to regulate banks and forex applicants in case of altering the amount of hard currency and the purpose after their request has been approved.

Before the amendment of the directive, banks were instructed to submit their comments based on the old version of the same directive.

“None of our comments are included,” said one CEO, who requested anonymity, told The Reporter.

For instance, a few bank executives have commented on giving the upper hand to exporters, depositors and high-value customers while allocating forex. Moreover, some banks have also requested for their executives to gain prior access in getting forex.

“To our surprise none of our comments are included,” a senior executive of a private bank said.

The new directive has also provided clarifications on priority sectors that are listed to gain primary access of forex.

Import of fuel, motor oil, lubricants, LGP gas, pharmaceutical products and fertilizers will continue to be prioritized.

In the latest amendment, it is also stated in a detailed manner that spare parts for construction machineries that would be used by the construction companies themselves, whose total value does not exceeding USD 50,000, will also be given priority. (Reporter)



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