Ethiopian Securities Exchange Reports Record 87.4 Billion Birr Weekly Interbank Turnover
Ethiopia’s interbank money market has posted its strongest weekly performance since launch, with commercial banks trading 87.4 billion birr in overnight funds between February 23 and 27.
Data released by the Ethiopian Securities Exchange (ESX) show the figure significantly exceeded the previous weekly high of 53 billion birr recorded in January. The transactions were executed through 125 overnight repurchase agreements (repos) over five working days.
Cumulative Turnover Nears 2 Trillion Birr
The latest activity pushes cumulative turnover on the platform to 1.96 trillion birr since its introduction in October 2024. At the current trading pace, the market is expected to surpass the two trillion birr milestone in the coming week.
Shift Toward Overnight Liquidity Management
The surge in volume indicates an accelerating shift in how Ethiopian banks manage short-term liquidity. Market participants are increasingly relying on overnight instruments rather than seven-day facilities, which previously accounted for the bulk of transactions.
This structural shift reflects broader adjustments under Ethiopia’s evolving monetary framework, where liquidity management is gradually moving toward market-based mechanisms rather than administrative allocation.
Implications for Monetary Transmission
The expansion of overnight trading suggests:
- Improved liquidity redistribution among banks
- Deeper participation in formal money markets
- Strengthening of short-term interest rate signaling
Since its launch as part of financial sector reform measures, the interbank platform has more than doubled transaction volumes within five months, indicating growing institutional confidence and operational integration.
The continued rise in activity is likely to enhance monetary policy transmission as authorities seek to reduce distortions and improve efficiency within the banking system.
Source: Birrmetrics