FORTUNE+ VIDEO SPONSORED CONTENTS ADVERTORIALS FORTUNE AUDIO Fortune Careers New TRADE AFRICA New

Fortune Logo

Central Bank Launches High-Stake Auction to Quell Dollar Demand

Aug 6 , 2024

The National Bank of Ethiopia (NBE) is set to launch a Special Foreign Exchange Auction tomorrow, August 7, 2024, designed to stabilise the shaky forex market. The move comes in response to the mounting pressure on the Birr and the increasing demand for US Dollars in the financial sector.

The weighted average bid price of all successful bids will be revealed in mid-afternoon, giving market participants valuable insights.

The Central Bank has set a cap, hoping to prevent a single bank from snagging more than 20pc of the total funds available at the auction. The regulation also seeks to create a competitive bidding environment, ensuring that all players have equal access to foreign exchange resources. Winning banks will secure Dollars at their bid price, with settlements taking place on the same day.

The auction, reminiscent of the mid-1990s, arrives at a critical juncture for the banking industry, which is besieged by a foreign currency shortage exacerbated by global economic trends and local demand. Analysts agree that these auctions are crucial for injecting much-needed liquidity into the banking system and stabilising the exchange rate, traded 84pc higher since the foreign exchange regime liberalization on July 29.

The NBE's initiative is expected to alleviate some of the intense forex pressures faced by local businesses and financial institutions. If successful, the auction may open doors for future central bank interventions bolstering economic stability and confidence in the national currency.

Put your comments here

N.B: A submit button will appear once you fill out all the required fields.



Related Posts

Share This Post
Linkedin
Google+


Most read

Latest News

Editor's pick

Commentaries

Ditching Carbon Pricing Reckless Bet with the Planet

In 2009, US President Barack Obama appointed Harvard Law School Professor Cass Sunste...

Africa's Debt Is an Opportunity

Almost every debate about African public finance centres on “Africa's debt burden” as its primary topic. The numbers are stark: the medi...

Fineline

Leaders of the National . . .

Leaders of the National Election Board are in a charm offensive mood, of a sort. Last week, they organised a rare tour for members of the me...

When the country’s most. . .

When the country's most senior diplomats and envoys return back to their posts after two-week debriefings, they leave behind a point or two...

Editorial

Soaring Taxes Fail to Plug Holes as Audit Reveals Enduring Waste

Jun 28 , 2025

Meseret Damtie, the assertive auditor general, has never been shy about naming names...

Expanding Federal Budget Tests Limits of Fiscal Discipline

Jun 21 , 2025

A well-worn adage says, “Budget is not destiny, but it is direction.” Examining t...

Desire to March to the Sea Should Spill Reason on the Way

Jun 14 , 2025

Yet again, the Horn of Africa is bracing for trouble. A region already frayed by wars...

Where the Roof Overhead Comes with a Ceiling on Hope

Jun 7 , 2025

Few promises shine brighter in Addis Abeba than the pledge of a roof for every family...

Gallery

Parliament Approves New Cabinet Members

Oct 6 , 2021

Parliament Approves New Cabinet, Incorporates Opposition Leaders Lawmakers have approved today the nominations of 22 ministers, including three opposition leaders. Two MPs have voted against, while 12 abstained...

2020 in Posterity

Jan 5 , 2021

TIGRAY VOTES DESPITE "NULL & VOID" THREAT

Sep 9 , 2020

IN-PICTURE: LAUREATE'S RECEPTION  

Dec 14 , 2019

PM Abiy Ahmed (PhD) at a Gala Dinner Called for the Awarding of the Félix Houphouët-Boigny Peace Prize

May 6 , 2019

Faces, Voices of Addis Abeba

Apr 26 , 2019

Sunday With Eden

Real Respect Shows Up First

A couple of weeks ago, I found myself at a social gathering where strangers and old acquaintances mix in a haze of small talk and light laug...

Absence of Agile Discipline

In Ethiopia, across both public and private sectors, a quiet saboteur undermines productivity: the meeting. Too often, gatherings stretch en...

Life Matters

The Quiet Roar Beneath the Calm

There is often a sense of awe when encountering someone who appears to have everything under control. Impeccably dressed, composed, and seem...

The Weight of the World

The film Straw did not just break a heart, it reached into something deeper, unsettling a primal fear that resides in every parent. As a mot...