Ethiopia imposes ceiling on forex transaction fees
The National Bank of Ethiopia (NBE) has directed all commercial banks to set fees and charges related to purchases of foreign exchange (FX), limiting them to not more than 4 percent, with effect from May 26.
The policy shift is part of the latest round of measures to further transform the foreign exchange market following Ethiopia's decision to liberalise the market starting July last year.
The new measures announced on May 20 also prohibit lenders from imposing additional charges, with forex related fees of all banks expected to be clearly disclosed to the public on a regular basis on the NBE website starting June.'To bring Ethiopia's foreign exchange related fees closer in line with global norms, NBE is also advising banks to ensure competitive, transparent and simplified pricing for their FX services. Accordingly, effective May 26 ,2025, all bank fees and charges related to the purchase of foreign exchange—for import of goods, service payments, or cash note purchases—shall not exceed 4 percent,' the regulator said.'Moreover, to ensure that FX fees are kept transparent and simplified for consumers, NBE is instructing banks to avoid the addition of various supplementary charges for minor, associated services,' it added.
As part of the latest changes, NBE has raised the limit for importers' advance payments to $50,000 from $5,000 per import transaction. This is meant to address a long-standing constraint that has been limiting the amount of forex that importers could provide upfront to their foreign suppliers.
NBE has also increased the forex cash limits for travellers, allowing purchases of up to $10,000 for personal travellers and up to $15,000 for business travellers—in cash or via debit card.
The egulator expressed confidence that the changes would help to ensure 'an active, competitive, and steadily growing foreign exchange market that satisfactorily meets the needs of Ethiopia's banking consumers and private sector'.
NBE has regularly been reviewing the performance of the foreign exchange market since the transition to a new FX regime on July 29, 2024.
In October 2024 the regulator ordered commercial banks to disclose to customers all fees and commissions related to trading in foreign currency, saying forex related fees and commissions are to be separately disclosed, reported, and charged to bank clients.
NBE started implementing a flexible exchange rate regime policy in late July 2024 as part of new measures to stabilise the economy.
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