National Bank of Ethiopia (NBE)  Sells USD 70 Million in FX Auction as Market-Based Allocations Continue

The National Bank of Ethiopia (NBE) sold 70 million US dollars in foreign exchange on Tuesday through a competitive auction involving 19 commercial banks, reinforcing its move toward a more market-driven foreign exchange allocation system.

According to the central bank, eight banks secured allocations in the auction, with a weighted average clearing rate of 155.0506 birr per US dollar. The result reflects ongoing efforts to guide exchange rate formation while easing pressure on hard-currency availability within the formal banking system.

The auction is part of a broader policy shift aimed at improving price discovery and reducing reliance on administrative foreign exchange controls. By channeling limited dollar supplies through transparent auctions, authorities hope to strengthen confidence in the interbank FX market and curb parallel market activity.

NBE said the latest sale aligns with its previously announced framework, under which foreign exchange auctions will be conducted more regularly to support liquidity management and smooth exchange rate movements.

The National Bank of Ethiopia has increasingly relied on auctions as a tool to balance foreign exchange demand from importers and banks against constrained supply, particularly as Ethiopia continues macroeconomic reforms under an IMF-supported programme.

Officials indicated that similar FX auctions will be held in the coming period, signaling continued intervention to stabilize the market while maintaining a market-clearing exchange rate regime.