On October 13, the National Bank of Ethiopia offered $140 million in foreign currency. Commercial banks bid for $152.09 million, 8.6 per cent above the allocation and a reversal of two consecutive undersubscribed auctions.
This was the first sale in the NBE’s expanded second-quarter programme. Announced on October 6, it plans to offer $840 million across six rounds from October to December. Each round carries $140 million, up from four regular auctions of $125 million each, or $500 million in total, during the previous quarter. The quarterly allocation is 68 per cent higher. After October 13, the scheduled rounds are October 27, November 10 and November 24, then December 8 and December 22, according to the auction programme details reported by Africa Business Insight.
More banks took part, and the offer grew.
Twenty-nine banks entered the latest round, and 26 received allocations, according to results released by the NBE. Three banks left without foreign currency. Bids rose by $28.60 million, or about 23.2 per cent, from the September 23 auction. The central bank increased its offer by $15 million.
Successful bids averaged 160.1072 birr per US dollar, compared with 160.2297 birr on September 23. That amounts to a marginal appreciation of about 0.08 per cent in the birr at auction. The cut-off rate was 158.1724 birr per dollar. The highest successful bid reached 160.9878 birr, while the lowest stood at 153 birr.
The September 23 sale drew $123.49 million in bids against $125 million on offer, and all 27 participating banks received allocations. On September 9, bids totalled $120 million against the same $125 million offer. October’s oversubscription follows those two shortfalls, though demand remains well below August’s peaks.
On August 12, banks bid $470.17 million for $125 million, and the weighted average rate reached 161.7994 birr per dollar. At a special auction on August 20, the NBE allocated $500 million against bids of $710.14 million. The weighted average rate was 160.2144 birr. Bids then fell to $170.51 million on August 26, before dropping below the amount offered in September.
October 13’s $152.09 million in bids was about 67.7 per cent below the August 12 total. Despite the sharp swings in volume, the weighted average rate has stayed close to 160 birr per dollar in recent auctions. The NBE’s indicative rate was around 161 birr per dollar on October 7. Before the July 2024 foreign-exchange reform, the birr had weakened steeply from roughly 43 to 47 per dollar; less than a month after the reform, it had moved above 82 per dollar.
The auction is one way commercial banks obtain foreign currency, alongside the interbank market and other authorised sources. It is part of reforms introduced in July 2024, when Ethiopia shifted from an administratively determined exchange-rate system towards a more market-based arrangement. The stated aims included narrowing the gap between official and parallel-market rates. The reforms were also intended to improve importers’ access to foreign currency and encourage foreign-exchange receipts through formal channels. Banks submit bids specifying how much currency they want and the rate they are prepared to pay; the NBE determines allocations from the results.
The NBE has also pushed for direct currency trading between banks. An automated foreign-exchange trading platform at the Ethiopian Securities Exchange launched in January 2026, but interbank trading remained limited and irregular. Auctions therefore remain a central channel for distributing dollars. The central bank publishes daily indicative rates based on market transactions. Under the reforms, service exporters may retain up to 100 per cent of their foreign-currency earnings, while fees on foreign-exchange transactions are capped at 1.5 per cent. Capital Ethiopia’s report described these measures alongside continuing pressure on businesses that buy imported goods and inputs.
Import-dependent firms have faced greater exchange-rate volatility and higher working-capital costs since the currency regime changed. They have also found prices harder to forecast. The expanded auction schedule raises the amount of dollars offered through the banking system, while the broader reform still relies on more interbank trading and formal foreign-currency flows.
These figures cover Ethiopia’s official dollar allocation, not the wider capital-market developments in this Nairobi finance report. The NBE’s published results do not say what drove the change in bidding. They also do not disclose each bank’s allocation or identify which sectors and import categories are expected to benefit.
The next auction is scheduled for October 27. Later rounds are set for November 10 and 24, followed by December 8 and 22.
