In a signal that Ethiopia's foreign exchange reforms are still finding their footing, the National Bank of Ethiopia pulled together coffee, sesame, and pulses exporters on December 1, 2025, for what it called a “high-level consultation.”
Ethiopia's forex reforms hit a snag as central bank scrambles to understand why export dollars aren't coming home.
Translation: not enough dollars are making their way back home.
Governor Eyob Tekalign chaired the session himself. That's how you know it's serious. The agenda was pretty straightforward: figure out why export proceeds aren't flowing back as expected, address bottlenecks, and remind everyone that repatriating foreign currency isn't optional.
Here's the thing. Since July 29, 2024, Ethiopia has been running a liberalized forex market. Banks set their own rates. No more NBE price controls. Exporters negotiate freely with their banks on conversion rates. Sounds great on paper.
But there's a catch. Exporters must immediately convert 50% of their export proceeds into birr at these negotiated rates. The other 50% stays in their Foreign Exchange Retention Accounts. That's the deal under NBE Directive No. FXD/01/2024.
The central bank insists it wants partnership, not punishment. They emphasized “constructive engagement” over enforcement mechanisms. Which is diplomatic speak for: we'd rather talk than crack down, but don't push it.
Ethiopia launched these reforms to fix long-standing economic distortions. The old system wasn't working. Now banks can buy and sell foreign currency among themselves and with clients at market rates. Independent forex bureaus can operate if they've got ETB15 million in capital and ETB30 million in security deposits. NBE steps in only for early-stage support or when markets get messy.
Since September 2025, the central bank has been conducting periodic assessments of unmet forex demand. They've also revamped how they calculate daily indicative exchange rates, incorporating interbank transactions and NBE sales and purchases. Alignment with international best practices, they call it.
The meeting reaffirmed NBE's mandate to safeguard Ethiopia's foreign exchange earnings. As currency exchange trading becomes more market-driven, regulators across Africa are grappling with similar challenges of balancing liberalization with oversight. The regulatory landscape continues to evolve as Ethiopian authorities work to create a more transparent and efficient foreign exchange system. Because at the end of the day, those export dollars are supposed to come home. That's kind of the whole point. Like Egypt's FRA oversight of forex trading, Ethiopia's central bank is taking a more active role in monitoring market participants to ensure compliance with repatriation requirements.
