Dollar Demand Outstrips Supply Nearly Fourfold at Ethiopia Forex Auction

August 13, 2026
By Mintesinot Nigussie

Demand for US dollars from Ethiopian commercial banks outstripped the amount offered by the central bank nearly fourfold at the latest foreign exchange auction, highlighting continued pressure for hard currency in the banking system.

Twenty-eight commercial banks submitted bids totalling 470.17 million US dollars at the National Bank of Ethiopia’s 25th foreign exchange auction, against an allocation of 125 million US dollars, according to results released on Wednesday.

The auction produced a marginal cut-off rate of 161.0050 birr per US dollar, while successful bids were awarded at a weighted average rate of 161.7994 birr per US dollar.

Only nine of the 28 participating banks secured foreign currency from the auction. Submitted bids ranged from 159.9825 birr to 163.9899 birr per US dollar.

The 3.8-to-one ratio between demand and the amount allocated indicates the scale of competition among banks for the available foreign currency. Banks offering rates below the cut-off were not successful in securing allocations.

The latest auction comes as Ethiopia continues to use market-based foreign exchange auctions as part of its foreign exchange reform programme. The central bank has been increasing the role of market-determined exchange rates while using auctions to provide foreign currency to the banking system.

The central bank said subsequent foreign exchange auctions would continue according to its established schedule.

Source: FSX Business News