Credit Cap Is Gone, Policy Rate Is 16 Percent: NBE Shifts to Interest-Rate-Led Policy

As reported by ENA English

Summary

• The National Bank of Ethiopia removed restrictions on how much commercial banks can lend and raised its benchmark policy rate by one percentage point to 16 percent at a Monetary Policy Committee meeting on July 13, 2026. Governor Eyob Tekalign said the credit cap, first introduced in 2024 to limit annual credit growth, had achieved its purpose and would be replaced by indirect tools while maintaining a tight stance. The committee kept the policy rate corridor at plus or minus three percentage points unchanged.
• The board also approved a cut in the NBE foreign exchange commission from 2.5 percent to 1.5 percent to lower import-related costs, and reduced the mandatory FX surrender requirement on goods exports from 50 percent to 30 percent so exporters can retain more of their earnings. The NBE said it will apply targeted additional reserve requirements on banks whose lending could add to inflation. Reserves have risen sharply since the 2024 reforms, and the current account deficit narrowed from $6.2 billion in 2023/24 to $1.8 billion in 2025/26.
• For BirrValue users, removing the credit cap may loosen bank lending over time, while the rate hike and reserve tools aim to contain inflation. Lower FX surrender rules can leave more dollars with banks for customers. Compare bank rates on [BirrValue](/banks) and check [Send Money](/send-money) before you convert.