The National Bank of Ethiopia (NBE) has stepped up its battle against illicit foreign exchange trading as it signals stronger enforcement amid improving currency availability across commercial banks.

Speaking on Wednesday about the foreign exchange auction held the previous day, NBE Governor Mamo Mihretu warned traders involved in the parallel market face severe sanctions, including confiscation of funds. “We are taking firm measures to protect the integrity of the official market,” he said.

While some traders cite foreign currency shortages as justification for turning to the black market, Governor Mamo dismissed these claims, noting that “most of these complaints have been addressed.” He also challenged reports that banks demand excessive collateral to issue Letters of Credit, affirming that such practices are no longer tolerated.

Beyond financial barriers, the governor acknowledged that bureaucratic delays have been a pain point for importers but promised swift reforms. “Improvements will come not in months, but within weeks,” he said.

To bolster its crackdown, the NBE has introduced a technology-driven inspection system designed to monitor and deter illicit FX transactions more effectively.

The central bank also pointed fingers at foreign actors, highlighting that money transfer organizations based in the United Arab Emirates are contributing to the distortion of Ethiopia’s currency market. These offshore entities are accused of deliberately undermining the official market and expanding the shadow economy.

Governor Mamo pledged continued action against these external disruptors. “Those targeting our financial system from abroad will face unwavering scrutiny,” he said.