Ethiopian Birr Weakens Against US Dollar in Latest NBE FX Auction

The National Bank of Ethiopia (NBE) conducts regular foreign exchange auctions. The strategy of NBE is to manage the currency valuation of Ethiopia and improve the foreign exchange liquidity. These auctions have led to a notable increase in the value of the US dollar against the Ethiopian birr.

On August 5, 2025, the National Bank of Ethiopia (NBE) conducted its ninth foreign exchange (FX) auction. In this Auction, they offered USD 150 million to banks. This amount is allocated to the 28 commercial banks of Ethiopia at a weighted average exchange rate of 138.26 Ethiopian birr (ETB) per US dollar. This allocation represents a weakening of the birr compared to previous rates.

In the special foreign exchange auction held on June 5, 2025, the weighted average exchange rate was 134.95 Ethiopian birr (ETB) per US dollar. This shows a significant depreciation of the Ethiopian birr.

After increasing the demand from importers, the Ethiopian government increased the offered amount to stabilize the market as part of ongoing reforms.

Last week, reports from the parallel market showed that the value of the Ethiopian birr increased to 174 ETB per USD. Meanwhile, the official auction rate for Ethiopian birr is 138.26 ETB per USD.

These foreign exchange auctions are part of the macroeconomic reforms by the National Bank of Ethiopia. The goal is to stabilize the foreign exchange market and address the foreign exchange shortages in Ethiopia. The National Bank of Ethiopia also launched initiatives like the Debo campaign to encourage legal remittances and foreign currency accounts.

However, Ethiopians are concerned about the larger gap between the official and parallel market rates. However, NBE has indicated that it will continue to monitor market developments.