• 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.

• Auction size: National Bank of Ethiopia sold USD 500 million in its largest single foreign exchange auction to date. 

• Exchange rates: Weighted average clearing rate was 154.82 birr per USD with bids between 153.50–154.998 birr. 

• Demand: Total bids reached USD 592.3 million, exceeding supply by over USD 92 million. 

• Participation: 31 banks bid in the auction, 25 securing foreign currency allocations. 

• Policy context: Auction mechanism remains central to Ethiopia’s market-based FX regime post-2024 reforms. 

Why it matters:
This record forex auction reflects active implementation of Ethiopia’s market-based foreign exchange policy and provides significant hard currency liquidity to the banking sector. Exchange rate discovery and allocation outcomes inform pricing and liquidity conditions for imports and financial planning across institutions.