Ethiopia's National Bank announced on February 11, 2026, a sweeping set of nineteen amendments to its foreign exchange directive, introducing the most significant liberalization of the country's forex rules in recent years.
For services exporters — a category including software developers, consultants, and other professionals earning in foreign currency — the impact is substantial. Previously, these exporters were required to surrender a portion of their foreign exchange earnings to the central bank. Under the new rules, that requirement has been eliminated entirely: services exporters can now hold 100 percent of their export proceeds in a foreign exchange retention account for an indefinite period.
For Ethiopia's authorized commercial banks, the changes grant similarly significant flexibility. Banks can now enter into forward exchange transactions — contracts to buy or sell foreign currency at a future date — without seeking prior approval from the National Bank of Ethiopia for each transaction.
The structural changes to the market's architecture are equally significant. In 2026, the National Bank of Ethiopia launched an automated interbank foreign exchange trading platform hosted at the Ethiopian Securities Exchange, marking a departure from informal, ad hoc trading practices.
Accompanying this platform launch, banks and forex bureaus have been given authority to negotiate market-reflective exchange rates directly with one another, rather than being bound to centrally-set rates. This shift toward market-determined pricing has been credited with narrowing the historical gap between the official exchange rate and the parallel market rate during 2026.
The reforms also include a constraint on the National Bank of Ethiopia's own behavior. As part of an IMF-reviewed reform program, a new binding ceiling has been introduced on the central bank's foreign exchange market intervention, restricting the NBE's forex activity to the official auction platform rather than ad hoc intervention.
Together, these changes represent a fundamental recalibration of Ethiopia's approach to foreign exchange management — emphasizing flexibility for exporters, freedom for banks, market-determined pricing, and a constrained role for the central bank itself.
