NBE Begins Accepting Applications for Independent FX Bureaus

Addis Ababa: The National Bank of Ethiopia (NBE) announced that it has begun accepting applications for Independent Foreign Exchange Bureaus today.In its statement, the central bank said the announcement is in line with the newly approved Foreign Exchange Directive (FXD/01/2024) that became effective July 29, 2024.Independent FX Bureaus are authorized to engage in the buying and selling of foreign currency cash notes and are allowed to conduct such transactions on the basis of freely negotiated exchange rates with their customers, the statement added.Business entities owned by an Ethiopian national, Non-Resident Ethiopian, or Foreign Citizen of Ethiopian Origin are eligible to operate Independent FX Bureaus, it was learned.The capital requirements for obtaining an Independent FX Bureau license, as well as other specific operating requirements, are laid out in Annex 5 of the Foreign Exchange Directive.Accordingly, the applicant has to fulfill the minimum capital requirement of Birr 15 million and is able to provide a Security Deposit of Birr 30 million to be placed in a blocked account (which can be interest-earning) at any bank.NBE believes that Independent FX Bureaus can play an important part in further deepening the foreign exchange market by addressing the needs of customers who wish to buy or sell foreign currency cash notes.Moreover, such FX Bureaus can help in the on-going process of market determination of the exchange rate.According to the Bank, operators of such FX Bureaus are authorized to set buying and selling rates for foreign currency cash notes independently from posted bank rates.NBE Governor Mamo Mihretu stated that the launch of FX Bureaus reflects NBE's on-going implementation of its Strategy Plan commitments to "fundamentally transform the size, shape, and scope of Ethiopia's financial sector over the coming years."Source : Ethiopian News Agency