Ethiopia restarts forex auctions with a $150M offer, warns illicit traders of confiscation, and expands monthly FX sales to $500M.
Ethiopia Steps Up Forex Reforms to Stabilize the Birr
ADDIS ABABA – August 7, 2025
The National Bank of Ethiopia (NBE) has officially resumed its foreign exchange (FX) auctions with a $150 million offer to commercial banks on August 5, 2025, as part of intensified efforts to stabilize the Ethiopian birr (ETB). In a strongly worded statement, NBE also warned that any FX linked to illicit trade could be confiscated.
“Those exploiting unlicensed channels will face enforcement measures, including expropriation of funds,”
— Mamo Mihretu, Governor, National Bank of Ethiopia
The central bank has simultaneously raised its monthly FX supply to $500 million, up from previous months, thanks to what it calls a tripling of Ethiopia’s foreign reserves. The move signals a dual strategy of increasing market liquidity while cracking down on black market operators.
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28 Banks Participate in August Auction
According to NBE, 28 commercial banks took part in the August 5 auction, and all received the amounts they requested. The auction marks a key policy milestone in Ethiopia’s roadmap toward market-based FX management, in alignment with IMF-supported reforms.
The goal, according to officials, is to shrink the gap between the official exchange rate (around ETB 115/USD) and the parallel market, where the dollar had previously traded at over ETB 170/USD.
Shega reports the move could significantly reduce speculative FX hoarding and currency mismatches in trade transactions.
Targeting Parallel Market & Strengthening Reforms
The new auction and FX supply mechanisms are part of a larger macroeconomic reform effort designed to bring greater transparency and competitiveness to Ethiopia’s currency market.
“The steps we are taking are not isolated—they are part of Ethiopia’s transition to a reformed, transparent financial system,” Governor Mihretu added.