• National Bank of Ethiopia to launch interdealer FX trading platform in 2026.

• Current export FX surrender requirement stands at 70%.

• Exporters retain 30% under existing framework.

• Planned reform will reduce mandatory surrender ratio.

• Retention share for exporters set to increase.

• Shift follows gradual FX liberalization measures since 2024.

• NBE conducted two special FX auctions totaling $1 billion.

• Latest auction allocated $455.29 million at 155.17 Birr/USD.

• Interbank FX transactions to move from NBE allocation model to dealer-based trading.

• Reform signals transition from centralized FX distribution to market-based pricing.

Why it matters?
Lower surrender ratios and interdealer trading indicate structural shift toward FX market liberalization and reduced central bank allocation dominance.

• Ethiopia generated $288 million from horticulture exports.

• Export revenue covers flowers, fruits, and vegetables.

• Earnings recorded during the current fiscal reporting period.

• Sector contributes to foreign exchange inflows.

• Export volumes supported by commercial farms and smallholder producers.

• Horticulture remains a key non-traditional export segment.

Why it matters?
$288 million in earnings strengthens FX supply and supports Ethiopia’s export diversification strategy.

• 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.

• 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?

• National Bank of Ethiopia to conduct USD 70 million FX auction on February 17.

• Bids accepted from commercial banks between 10:00 AM and 12:00 noon.

• Results announced at 3:00 PM; settlement scheduled end of trading day.

• Notice issued in Addis Ababa on February 16.

• Auction part of standing bi-weekly foreign exchange programme.

• Policy aligns with macroeconomic reforms launched in 2024.

Why it matters?
The USD 70 million auction continues NBE’s bi-weekly FX allocation mechanism. The programme supports market-based currency pricing and liquidity management under ongoing macroeconomic reforms.

• 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 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.

• Ethiopia recorded $5.1 billion in merchandise export revenue in H1 of FY 2025/26, achieving 120% of target. 

• Service exports earned $4.5 billion and remittances contributed $4.6 billion in the same period. 

• FDI inflows reached $2.3 billion in first six months of fiscal year. 

• Export revenue exceeded target by $1.83 billion compared to same period last year. 

• Government pursuing $9.4 billion full-year export revenue goal for FY 2025/26. 

• Minister of Trade highlighted Digital Ethiopia 2030 Strategy online trade services implementation. 

• Export performance report delivered at six-month performance review in Dessie. 

why it matters? Strong export performance expands foreign exchange earnings and supports Ethiopia’s economic reform agenda, reinforcing trade sector contribution to growth.

• National Bank of Ethiopia announced a $70 million foreign exchange auction on Tuesday, February 3. 

• Auction follows an oversubscribed previous FX sale. 

• Commercial banks will participate in the FX auction. 

• Bidding window schedule for banks was specified. 

• Auction is part of the central bank’s continuing hard currency allocation operations. 

why it matters?
The planned $70 million FX auction reflects ongoing National Bank of Ethiopia efforts to supply hard currency and address high demand in Ethiopia’s foreign exchange market.

The National Bank of Ethiopia (NBE) enacted targeted measures in response to a recent surge in the parallel foreign exchange market, which saw the informal USD/ETB rate spike. The actions include a large unscheduled USD auction and a new directive tying import foreign exchange allocations to customs valuation benchmarks, aimed at stabilizing the currency and discouraging informal trading.

Key Takeaways:

• Forex spike: Parallel forex rates reached as high as 190 birr per dollar, above official rates below 160 birr.

• Large FX injection:  USD 500 million  was injected via a special forex auction to meet heightened demand.

• New directive: Banks must use Ethiopian Customs Commission valuation data when issuing forex for imports.

• Objective: Measures target illegal/parallel forex activity and enhance consistency in forex valuations.

• Reform context: Steps align with ongoing post-2024 forex market reforms and market-clearing exchange rate systems.

  
  

Why It Matters:

• Ethiopia lost an estimated USD 24.6 billion to trade-related illicit financial flows (2013–2022). 

• Losses place Ethiopia among the top ten globally for such outflows. 

• Illicit flows result from invoicing mispricing and non-reported trade. 

• Across sub-Saharan Africa, total trade value gaps reached 152.9 billion US dollar in 2022. 

• Report highlights the scale of unrecorded capital movement in foreign trade. 

Why it matters:

• Interbank FX market opened: Ethiopia’s central bank has launched a competitive interbank foreign exchange market with real-time pricing. 

• Market pricing: Banks conduct FX trades through competitive bids, enhancing price discovery and transparency. 

• Regulated oversight: The National Bank of Ethiopia (NBE) keeps strict supervision and guidelines over the new trading platform. 

• Platform tech: The market uses an automated trading system (ESX) for efficient transaction execution. 

• Policy change: This move aligns with Ethiopia’s broader market-based FX reforms since 2024. 

Why it matters:
Opening an interbank FX market marks a significant step in Ethiopia’s transition toward market-based foreign exchange pricing, helping align official pricing with market dynamics. This can improve liquidity allocation among banks and provide more reliable benchmark rates for the broader financial and business community.