Ethiopia’s latest foreign exchange auction ended with commercial banks bidding for 120 million US dollars, leaving 5 million US dollars of the 125 million US dollars offered by the central bank without bids.
The result marks a departure from recent foreign exchange auctions in which demand from banks has generally exceeded the amount of currency made available by the National Bank of Ethiopia.
The September 9 auction, the 28th conducted by the central bank, attracted 20 commercial banks, all of which were successful in securing foreign currency allocations, according to the NBE.
The cut-off rate was 158.3500 birr per US dollar, while the weighted average rate of successful bids was 160.5357 birr per US dollar. The highest bid was 160.7556 birr per US dollar, while the lowest was 158.3500 birr.
The outcome comes as the central bank continues to reshape Ethiopia’s foreign exchange market following the July 2024 exchange-rate reform, which moved the birr towards a more market-determined system.
Foreign exchange auctions are among the mechanisms the NBE uses to supply foreign currency to commercial banks. The central bank has increased its use of market-based allocation mechanisms as it seeks to improve access to foreign currency through formal channels.
Source: FSX Business News
