In a move to enhance the country’s gold supply and foreign currency reserves, the National Bank of Ethiopia (NBE) has issued a new directive allowing gold-producing companies to retain foreign currency earned from gold sales for three months.
Previously, the bank’s foreign exchange regulation allowed producers to hold onto foreign currency for just one month.
NBE Governor Mamo Mihretu emphasized the need to implement a system that encourages gold suppliers to contribute to a steady inflow of foreign currency. The new regulation will allow large producers to retain 50% of their income from gold sales in foreign currency, with the remaining 50% being converted based on the daily foreign exchange rate set by the NBE.
The directive updates the pricing structure for gold purchases, which have been based on the foreign currency selling rate published on the NBE’s website since July 31, 2024. Suppliers will continue to receive 95% of the gold’s value upfront, with the remaining 5% reserved until final payment. If the final payment day falls on a holiday or weekend, the supplier can choose the next working day to receive payment.
For larger suppliers, particularly those providing between 250.01 grams to 25 kg of gold, the NBE will offer additional incentives to cover operational costs. Suppliers delivering over 25.01 kg of gold in a single transaction will receive even higher incentives.
The revised directive, signed by the governor, is aimed at creating a lasting incentive for gold suppliers and ensuring a sustainable flow of foreign currency into Ethiopia’s economy. According to the bank, the changes are intended to support the traditional gold production sector, which plays a significant role in the country’s economy. The new three-month period is expected to provide greater flexibility for gold-producing companies, enabling them to cover costs and reinvest in their operations.
Source: Sheger FM 102.1
