• National Bank of Ethiopia allocated $455.29 million in second $500 million special FX auction.

• Weighted average selling rate settled at 155.17 Birr per USD.

• Highest accepted bid reached 156.30 Birr per USD.

• Lowest accepted bid stood at 153.80 Birr per USD.

• Auction conducted to supply foreign currency to commercial banks.

• Follows earlier $500 million special FX auction in February 2026.

Why it matters?
The 155.17 Birr/USD settlement rate signals current interbank FX pricing and impacts import costs and liquidity conditions.

• M-Pesa Ethiopia and Gebeya Inc launched the “Dala AI Bundle” in Ethiopia.

• The bundle integrates AI-powered digital services with M-Pesa’s mobile money platform.

• Dala AI provides business tools for digital marketing, customer engagement, and analytics.

• The service targets SMEs and digital entrepreneurs using M-Pesa payments.

• The partnership aims to expand digital commerce and AI adoption in Ethiopia.

• Launch supports broader fintech and digital transformation initiatives in the market.

Why it matters?

• Expands AI-enabled services for Ethiopian SMEs.

• Strengthens M-Pesa ecosystem beyond payments into business tools.

• Supports digital economy growth and local tech sector development.

• Development Bank of Ethiopia and African Development Bank discuss new external financing for agro-industry and job creation.

• Talks focus on mobilizing concessional and blended finance for industrial and agricultural projects.

• Financing targets agro-processing, manufacturing, and employment-generating sectors.

• DBE seeks foreign currency funding to support private sector investment.

• AfDB engagement aligns with Ethiopia’s industrialization and job creation agenda.

• Discussions include structuring facilities to improve project bankability and disbursement capacity.

Why it matters?

• External financing can ease foreign currency constraints and expand credit to agro-industrial investors.

• IFC will provide a $10 million unfunded risk-sharing facility to Dashen Bank for SME loans. 

• Dashen Bank can extend up to $20 million in SME lending under the facility. 

• Facility will cover 50% of credit risk on targeted SME loan portfolio. 

• Priority sectors include agribusiness and women-led enterprises in Ethiopia. 

• Support comes via IDA18 IFC-MIGA Private Sector Window first-loss guarantee. 

• Dashen Bank builds on ongoing IFC advisory partnership on SME operations. 

Why it matters?
The risk-sharing facility increases Dashen Bank’s capacity to lend SMEs, emphasizing finance access for agribusiness and women-led enterprises, directly affecting credit availability for small enterprises in Ethiopia. 

• NBE FX Auction No. 18 cleared at 155.12 ETB per USD on latest auction date. 

• National Bank of Ethiopia offered USD 70 million in the auction. 

• Total bids reached USD 145.31 million, more than double supply. 

• 31 commercial banks participated in the auction. 

• 21 banks secured foreign exchange allocations. 

• Marginal cut-off rate set at 155.1200 ETB per USD. 

• Weighted average rate settled at 155.1223 ETB per USD. 

Why it matters?

• Finance Minister Ahmed Shide met AfDB, IFAD, and BADEA leaders during the African Union Summit in Addis Ababa.

• BADEA discussions covered financing for Bishoftu International Airport and Koysha Hydropower Project.

• Talks included road development, trade finance, co-financing, and climate-related infrastructure for COP32.

• AfDB discussions addressed energy sector reforms and scaling support under Mission 300.

• IFAD discussions covered climate-smart agriculture and Farmer-Led Irrigation Development program.

• Meetings focused on aligning climate and investment programs with Ethiopia’s COP32 preparations.

Why it matters?
Ethiopia is advancing financing discussions for infrastructure, energy, and agriculture projects. Engagements with AfDB, IFAD, and BADEA support reform priorities and COP32-related climate investments.

• ESX granted Approval in Principle to several major banks for Main Market listing.

• Banks include Awash, Dashen, Bank of Abyssinia, Abay, Anbesa, and Amhara.

• Listing requires securities registration with ECMA and prospectus publication.

• Dashen Bank and Bank of Abyssinia finalized securities registration and published prospectuses.

• ESX expects additional financial and non-financial listings before fiscal year end.

• Investors advised to open accounts through licensed market intermediaries and exchange members.

Why it matters?
Major banks are advancing toward listing on ESX’s Main Market. Securities registration and prospectus publication mark progress toward public trading and capital market expansion.

• ECMA requires more than 16 supporting documents for capital market licensing applications.

• Sixteen institutions have been licensed across investment banking, advisory, and brokerage services.

• Most licensed firms are subsidiaries of local banks, including CBE Capital and Wegagen Capital.

• BDO Consulting PLC received a corporate investment advisory license, raising advisory firms to nine.

• Total licensed capital market service providers now stand at 16.

• Transition from PLC to joint-stock company takes six to eighteen months.

• Interest spans more than 15 licensing categories, with demand expected after the Collective Investment Schemes Directive issuance.

Why it matters?
Sixteen institutions are now licensed under ECMA, including nine advisory firms. Licensing requirements and PLC-to-joint-stock transitions shape capital market participation and public fundraising capacity.

• Ethiopia’s banking sector posted a combined profit of 91.06 billion birr in the first half of the fiscal year. 

• Profits followed currency liberalisation that lifted sector earnings. 

• Some banks incurred foreign exchange losses due to high FX exposure. 

• Results varied widely by risk profile and balance sheet position. 

Why it matters?
Bank profitability aggregates indicate overall sector performance mid-year 2026, while foreign exchange losses signal risk exposures tied to recent currency reforms, affecting banks’ balance sheets and financial stability. 

• National Bank of Ethiopia will open four new regional branches.

• Branches planned in Bahir Dar, Hawassa, Jimma, and Dire Dawa.

• Project aims to strengthen regional supervision and service delivery.

• Construction and preparatory works have already started.

• Implementation has faced delays from material shortages and site issues.

• National Bank of Ethiopia is coordinating with regional administrations.

Why it matters?
The expansion increases National Bank of Ethiopia’s regional presence, affecting banks, microfinance institutions, and financial supervision across major commercial centers.

• IMF extends deadline for Commercial Bank of Ethiopia (CBE) to cut net open position (NOP) to March 2026 from end-2025.

• CBE must reduce on-balance sheet NOP by at least 50 % under extended compliance timeframe.

• CBE’s short FX position worsened to about -$500 m from -$200 m year-on-year.

• National Bank of Ethiopia (NBE) and CBE hold weekly consultations on revised NOP plan.

• CBE launches diaspora remittance campaigns and tailored loan products to boost FX inflows.

• Asset Quality Review of CBE lending portfolio due by end-June 2026.

• NBE’s updated NOP directive sets FX exposure limit at ±18 % of a bank’s Tier 1 capital.

Why it matters?
Ethiopia’s largest bank must meet IMF-agreed FX risk limits by March 2026, reflecting weaker remittances and private sector FX demand. Progress influences foreign exchange market functioning and CBE balance sheet risk compliance.

• Ethiopian government plans new excise taxes on alcohol, tobacco, fuel, and vehicles under IMF-linked fiscal reforms. 

• Broad fuel subsidies are to be phased out as part of the tax changes. 

• Digital excise stamp system to be strengthened for tax collection (vehicle, alcohol, tobacco). 

• Vehicle circulation taxes will be introduced under the new tax regime. 

• Value-added tax and excise on fuel are included in the proposed tax package. 

• Reforms form part of broader measures to expand the fiscal revenue base. 

Why it matters?
New tax measures on fuel, vehicles, alcohol, and tobacco adjust Ethiopia’s revenue structure and fiscal policy. Digital excise systems affect tax administration and collection efficiency.

• National Bank of Ethiopia plans to allow unlimited deposits of legally earned foreign currency in commercial banks.

• Policy targets individuals and entities earning foreign currency through legal channels.

• Reform aims to ease foreign exchange constraints affecting importers and exporters.

• NBE governor Eyob Tekalign presented the measure during the central bank’s six-month performance report to parliament.

• NBE conducted biweekly foreign currency auctions, collecting ETB 1.3 trillion in the first half of the fiscal year.

• Parliamentary committee raised concerns on credit supply, trade imbalance, and monitoring foreign exchange demand.

  Why it matters?

  The measure could increase formal foreign currency inflows into the banking system.
  It may support import financing, export operations, and foreign exchange availability.

• National Bank of Ethiopia’s 17th FX auction cleared at 155.05 birr per USD. 

• NBE allotted USD 70 million to banks from total bids of USD 127.25 million. 

• Weighted average rate of successful bids was 155.0506 birr per USD. 

• Accepted bid rates ranged from 154.8141 to 155.0519 birr per USD. 

• 19 commercial banks participated; 8 secured foreign exchange. 

• Clearing rate was slightly weaker than previous 154.82 birr per USD auction. 

• Next FX auction scheduled under NBE’s biweekly calendar. 

Why it matters?

The  successive FX auctions set the official dollar price for commercial bank allocations, affecting import financing costs and formal FX market liquidity. It signals ongoing birr exchange rate adjustments under Ethiopia’s auction-based FX management.