Ethiopia Plans $520 Million in FX Auctions Until March

The National Bank of Ethiopia will inject $520 million into the foreign-exchange market between December and March, extending a period of elevated supply from the central bank.

In its quarterly schedule published Thursday, the central bank said it will auction $100 million in December and an additional $420 million in the third quarter of the 2025/26 fiscal year. Bi-weekly sales will start on December 2 and 16, each offering $50 million, before rising to $70 million per auction from January through March.

The move follows a stronger FX position that allowed the NBE to offer $150 million in a single auction in August, more than double previous allotments. FX inflows rose 33% last year to $32 billion, buoyed by higher coffee and gold revenues. 

Ethiopia’s foreign-exchange market has moved in tightly coordinated steps since the float of the Birr in July 2024. A market-watch report covering November 10–15 showed commercial banks nudging dollar rates upward almost uniformly, guided by more pronounced shifts in the central bank’s reference rates. Buying prices at most banks rose from about 150.65 Birr to 151.49 Birr, while selling prices climbed from 153.15 Birr to 154.06 Birr.

The NBE’s own indicative rates moved faster, rising nearly 2.5 birr over five days last week, signaling a policy-guided depreciation while keeping the official and parallel markets aligned. Larger banks adjusted quickly to the new benchmarks, while smaller lenders maintained more conservative rates.

By increasing auction volumes and adjusting benchmark prices, the NBE aims to channel more transactions through official channels, narrow the gap with the parallel market, and maintain orderly conditions in the currency market.

The August auction, which drew bids from 12 banks and cleared at a weighted average of 134.95 Birr per dollar, reflected the central bank’s intent to project confidence in its ability to manage the floating currency. The expanded auction schedule signals continued efforts to balance liquidity, stabilize expectations, and gradually guide the Birr’s value.