Addis Ababa — The Ethiopian Birr faced renewed downward pressure on Tuesday as the National Bank of Ethiopia (NBE) announced the outcome of its latest foreign-exchange auction, setting a new weighted average rate of Birr 154.39 to the US dollar.
The figure underscores the continuing fragility of the local currency amid tightening external financing conditions and persistent demand for hard currency across key sectors.
In its statement, the National bank confirmed that 17 commercial banks secured the full amounts of foreign exchange they requested during the auction. The clearing of all bids, analysts say, reflects both the intensity of the banks’ demand and the limited supply of foreign currency available through official channels.
The auction, the eleventh of the year, forms part of the government’s broader attempt to impose greater transparency and discipline on the allocation of scarce forex reserves.
The depreciating Birr mirrors Ethiopia’s wider macroeconomic challenges, including a widening trade deficit, reduced export receipts, and rising import costs.
Economists note that the auction rate provides an increasingly important indicator of the currency’s real market value, at a time when the parallel market continues to exert upward pressure on the dollar’s price.
Despite these pressures, the NBE reiterated that the auction schedule will continue as planned, with the next round due in two weeks. Market watchers expect future auctions to provide further signals of the monetary direction as the country navigates debt-servicing obligations, tight global liquidity, and ongoing domestic inflationary strain.
The National bank’s announcement is likely to be scrutinised closely by businesses and investors, many of whom are contending with elevated operational costs and uncertainty surrounding future forex availability.
