Forex trading is legal in Ethiopia under the regulatory framework established by the National Bank of Ethiopia (NBE). The NBE, as the country's central bank, is responsible for regulating all foreign exchange transactions through various directives and proclamations (1). Ethiopian law permits the operation of licensed forex bureaus and authorized foreign exchange dealings, provided they comply with the established regulatory requirements and obtain proper licensing from the NBE.
The regulatory landscape for forex trading in Ethiopia underwent significant changes in 2024 with the introduction of Foreign Exchange Directive No. FXD/01/2024. This comprehensive directive established clear rules, roles, and responsibilities in Ethiopia's foreign exchange market, aiming to foster greater trade, financial stability, and economic growth (2). The new framework introduced a competitive, market-based exchange rate system and addressed various foreign exchange-related activities including the licensing of forex bureaus.
"Foreign exchange bureaus are only authorized to engage in the buying and selling of cash notes and are not authorized to operate in other segments of the forex market."
Licensed forex bureaus in Ethiopia must meet strict requirements including a minimum security capital of 30 million Ethiopian birr, proper trade licenses from the Ministry of Trade and Regional Integration, and evidence of necessary security devices to protect against counterfeit currency (1). These bureaus are limited to retail forex operations involving cash transactions and cannot engage in trade-related activities such as opening Letters of Credit for import or export transactions. The NBE has granted operational licenses to several non-bank forex bureaus, demonstrating the government's commitment to developing a regulated forex market.
Individual retail forex trading by Ethiopian residents through international brokers operates in a regulatory gray area, as the current directives primarily focus on institutional forex operations and licensed bureaus. While the NBE's regulations do not explicitly prohibit individual forex trading, traders should exercise caution and ensure compliance with local laws regarding foreign currency transactions and capital controls (2). The evolving nature of Ethiopia's forex regulations suggests that clearer guidelines for individual retail trading may emerge as the market develops.
Source:
https://nbe.gov.et/fx/
https://www.trade.gov/market-intelligence/ethiopia-finance-launches-new-forex-directive
Last updated: 31-05-2025 Disclaimer: This article does not provide legal advice. If you need legal advice, please contact an attorney directly.
