The National Bank of Ethiopia (NBE) has announced a new directive requiring commercial banks to use Ethiopian Customs Commission reference prices as indicative rates for selected foreign exchange transactions, particularly those involving Letters of Credit (LCs).
Under the new measure, banks will apply customs reference prices when processing LCs and other approved payment instruments, aiming to reduce pricing discrepancies across the foreign exchange system.
The policy builds on Ethiopia’s foreign exchange reforms introduced in July 2016 E.C., which gradually shifted the country away from a tightly controlled FX regime toward a more market-oriented framework. While banks are permitted to negotiate exchange rates with customers within regulatory limits, inconsistencies have persisted between banking prices and customs valuations.
According to the NBE, significant differences have been observed between prices used by banks for Letters of Credit and those quoted by the Ethiopian Customs Commission, complicating trade documentation, FX verification, and compliance checks.
No Comment Found.