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National Bank of Ethiopia lifts credit growth cap, eases forex surrender rules

The National Bank of Ethiopia NBE has removed the credit growth cap for commercial banks, nearly three years after its introduction in August 2023. This decision follows a Monetary Policy Committee meeting, where regulators noted a successful transition to an interest-based policy framework. The cap, initially set at 14 percent to curb inflation, was later adjusted to 18 percent in December 2024 and 24 percent in September 2025. Although inflation has eased due to economic reforms and forex market liberalization from mid-2024, the NBE anticipates continued double-digit headline inflation for the next six months, partly due to the Middle East conflict. In response, the NBE is increasing its policy rate by one percentage point to 16 percent as a counter-tightening measure. Additionally, the central bank is reducing the forex surrender requirement for goods exports from 50 percent to 30 percent to boost export competitiveness and market confidence. The NBE's forex commission rate has also been lowered by one percentage point to 1.5 percent.