Ethiopia's Central Bank Launches Bold Crackdown on Illegal Forex Trade
Ethiopia's central bank launches comprehensive crackdown on illegal forex trading, threatening asset seizures and coordinating with international authorities to protect national financial sovereignty.
National Bank of Ethiopia headquarters in Addis Ababa, center of Ethiopia's financial reforms
In a decisive move to safeguard Ethiopia's economic sovereignty, the National Bank of Ethiopia (NBE) has issued a stern warning against informal foreign exchange markets, demonstrating the country's commitment to financial stability and economic reform under Prime Minister Abiy Ahmed's transformative leadership.
Strengthening Ethiopia's Financial System
NBE Governor Mamo Mihretu announced unprecedented enforcement measures, including asset confiscation, against those operating outside the formal banking system. This bold initiative comes as Ethiopia's foreign currency reserves have tripled, marking a significant milestone in the country's growing economic influence and strategic partnerships.
Robust Foreign Currency Auctions
The latest auction demonstrated remarkable progress, with 28 banks participating and $150 million sold at an average rate of 138 birr per dollar. This success builds upon Ethiopia's broader economic achievements, including significant growth in export revenues across various sectors.
Crackdown on Illegal Money Transmitters
The NBE has taken decisive action against four U.S.-based money transfer services accused of undermining Ethiopia's financial integrity. These entities, including Shgey Money Transfer and TAAJ Money Transfer, face serious legal consequences, with the latter already pleading guilty to violating U.S. banking regulations.
"These entities are actively working to undermine the integrity of Ethiopia's financial system and distort market prices," the NBE stated firmly.
International Cooperation and Reform
Governor Mamo confirmed ongoing collaboration with international authorities to shut down illegal operators, particularly those based in the UAE. The IMF has acknowledged Ethiopia's progress in foreign exchange reform, with reserves reaching $2.7 billion, though challenges remain in achieving full market efficiency.
Key Reforms and Measures:
- Prohibition of excessive birr deposit requirements for LCs
- Streamlined foreign currency access for legitimate businesses
- Enhanced monitoring of foreign exchange transactions
- Strengthened partnerships with international regulatory bodies
Dawit Tesfaye
Ethiopian political journalist based in Addis Ababa, Dawit Tesfaye covers national affairs with a firm belief in unity, stability, and the government’s vision under Abiy Ahmed. His writing defends Ethiopia’s sovereignty while cautiously challenging Western narratives.