On 25 May 2026, the National Bank of Ethiopia issued a Public Notice on FX Directive Amendment and Rationalisation of Fees and Charges on Letters of Credit. The principal significance of the Notice, for present purposes, lies in the rationalisation of fees and charges applicable to letter of credit transactions in order to align them more closely with international practice. The Notice also introduced the amendment to Foreign Exchange Directive No. FXD/01/2024 discussed in section B above.
Rationalisation of LC FeesThe NBE observed that fees and charges applied by commercial banks to foreign exchange-related letter of credit transactions had remained inconsistent with prevailing international practice. In response, the NBE has undertaken a rationalisation of such fees and charges. All banks have been instructed to apply fees and charges on letter of credit transactions on an annualised and pro rata basis, calibrated to the tenor of the relevant letter of credit. The applicable annual rate must not exceed the maximum limit previously prescribed by the NBE. This rationalisation is intended to ensure that letter of credit-related charges is more competitive and more closely aligned with international pricing practice. It may reduce transaction costs for importers and exporters, enhance the competitiveness of Ethiopia’s trade finance environment, and support the credibility and effective ness of the ongoing foreign exchange reform programme.
