Interview with Actress Marta Goitom

| Interview with Actress Marta Goitom

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The 13 major new policy changes included in the foreign exchange reform effective today are:

1. The foreign exchange management system will shift to a market system where foreign exchange rates are determined between banks and their customers. The role of the National Bank of Ethiopia will focus on stabilizing the market.

2. The obligation to transfer foreign currency to the National Bank of Ethiopia has become outstanding. Thus, exporters and commercial banks can retain the foreign exchange they earn, which will greatly improve the supply of foreign exchange to the private sector.

3. An earlier ban on 38 imported goods has been lifted. While capital account outflows are restricted as before, the foreign exchange market has been liberalized for imports of goods and services.

4. Exporters used to keep 40% to 50% of their foreign exchange earnings.

5. Foreign exchange rules and regulations used by banks for various incoming goods have remained.

6. In addition to the existing foreign exchange bureaus established by banks, private non-bank foreign exchange bureaus will be established. These non-bank foreign exchange offices will also be given operating licenses to buy and sell foreign currency cash at market rates.

7. An amendment regulation will soon be issued to remove restrictions on the importation of goods in franco currency.

8. A number of laws regarding the management of foreign currency accounts opened by foreign institutions, foreign investors and Ethiopians (diasporas) have been repealed.

9. Residents of Ethiopia are allowed to open foreign currency accounts where they can deposit their remittances, salary/rental income paid in foreign currency and other income, and use these foreign currency accounts to make foreign service payments.

10. The interest rate ceiling that was previously paid by private companies or banks on foreign loans has been lifted.

11. Qualified foreign investors are allowed to participate in the Ethiopian Securities Exchange.

12. Companies operating in special economic zones are granted special foreign currency usage rights, including full retention of foreign currency earnings.

13. Various strict rules that were imposed on the amount of foreign currency cash that should be carried by travelers traveling from Ethiopia to foreign countries or entering Ethiopia have been abolished.