The National Bank of Ethiopia (NBE), has issued “Retention and Utilization of Export Earnings and Inward Remittances” No. FXD/66/2020, which has repealed and replaced FXD/48/2017. Directive No. FXD/66/2020, which came into effect as of September 16th 2020, repealed Article 5 (4) of FXD/48/2017 and added sub-clauses 3 and 4 to Article 6 of FXD/48/2017.
The provisions of Articles 6 (3) and 6 (4) of Directive No. FXD/66/2020 entitles exporters of Goods or Services and recipients of foreign exchange (referred by Directive No. FXD/66/2020 as ‘eligible customers’) to utilize the balance in foreign exchange retention Account “A” only for import of the following. These are:
a) Pharmaceuticals and pharmaceuticals products such as medicine, laboratory reagents, laboratory equipment, medical equipment, and appliances;
b) Agricultural inputs and machinery such as fertilizers, seeds, pesticide, animal hybrids, animal feeds, irrigation pumps, tractors, harvesting machinery, and their spare parts, machinery, and equipment;
c) Chemicals;
d) Manufacturing inputs, machinery, and equipment such as raw materials, chemicals, machinery, equipment, spare parts, and accessories;
e) Motor oil, lubricants, and LGP gas;
f) Import of nutritious food for babies; and
g) Import of edible oil, wheat, and sugar;
In addition, eligible customers are also allowed to sell all or part of their balances in Account “A” to a bank, at any time at a freely negotiated rate but that cannot exceed the selling rate of the exchange rate of the day. Similarly, eligible customers can sell or part of their balances in Account “B” to a bank, at any time up to 28 days from the date of credit at a freely negotiated rate but that cannot exceed the selling rate of the exchange rate of the day.
Please note that retention Account “A” is the 30% of the foreign exchange amount that the exporter or the recipient can maintain in foreign exchange for an indefinite period, while Account “B” is the 70% of the foreign exchange amount that the exporter or the recipient can maintain in foreign exchange for 28 days from the date of the credit of the foreign exchange into the Account "B".
Please see the attached Directive for further details.
Posted on October 2, 2020
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 Retention and Utilization of Export Earnings and Inward Remittances_FXD-66-2020.pdf | 1455 kB |