Whereas, the National Bank of Ethiopia is vested with the power to determine the terms and amount of external indebtedness of banks and other financial institutions and further to grant permission for transactions taking place in Ethiopia in currencies other than the Ethiopian Legal Tender Currency;

Whereas, it has become necessary to facilitate access to foreign exchange to foreign currency generating activities by allowing banks to intermediate in foreign currency through borrowing from external lenders and lending in foreign currency to such activities, accordingly;

Whereas, the National Bank of Ethiopia is responsible to ensure that banks are properly managing their foreign exchange and credit risks;

Now, therefore, in accordance with Article 5(9 and 10), Article 17(3) and 27(2) of the National Bank of Ethiopia Establishment (as Amended) Proclamation No. 591/2008, the National Bank has issued this Directive.