The National Bank of Ethiopia (NBE) has canceled a directive that required commercial banks to buy Treasury Bonds ( T-bonds) in a crucial move that could reshape Ethiopia’s financial sector.
Directive No. MFAD/TRBO/001/2022, which required banks (except the Development Bank of Ethiopia) to invest a portion of the loans borrowed and issued in government treasury bonds, was officially revoked on June 30, 2025.
The new directive, titled “Treasury Bond Procurement (Revocable) Directive No. MFAD/TRBO/002/2025”, shows that the National Bank has changed its approach to the management of money laundering and the provision of loans in the banking sector.
While the previous directive, which came into effect from 2022, aimed to spend money on government finances, it would have restricted the capital that commercial banks could access for direct loan provision
.The repeal of the directive is expected to bring greater flexibility to the activities of Ethiopian banks. With the lifting of the mandatory bond procurement requirement, banks will have greater discretionary power over their investment portfolios, and most importantly more capital to provide loans to businesses and individuals.
The central bank said that under the previous guidelines, any Treasury bonds designated for June 2025 that have not yet been purchased will apply. Banks are given notice that they are obliged to repay these purchases by July 15, 2025.
Furthermore, it was noted that any treasury bonds issued prior to the issuance of the new directive or issued under the interim decree will continue to be governed by the provisions of Directive No. MFAD/TRBO/001/2022.
