Banks told not to allocate over 50% of foreign currency for non-priority items

The National Bank of Ethiopia (NBE) has unveiled a new directive, which demands for commercial banks to allocate not more than 50% of their foreign currency for items not included in the NBEs new priority list.

In addition to this, a minimum of 50% of forex resources is also required to be distributed to these priority items.

The directive additionally declares that 15% of the forex resources have to be distributed to the first priority item, 45% to the second, and the last 40% to the third.

The first priorities of foreign currency will be allocated for pharmaceuticals, inputs for manufactured edible oil and Liquefied Petroleum Gas (LPG).

Secondly, inputs of agriculture and manufacturing. Motor oil and lubricants as well as agricultural inputs and machineries take the third priority of foreign currency allocation priority of the fresh “Transparency in Foreign Currency Allocation and Foreign Exchange Management” Directive of the NBE.