The National Bank of Ethiopia announces further foreign exchange auctions as demand persists despite currency fluctuations. The Birr was traded at 131.71 against the Dollar during a central bank auction held today, reflecting a modest 2.96pc increase. The National Bank of Ethiopia (NBE) offered half a billion dollars in what is now its third auction since authorities liberalised the currency regime in late July of last year. A day prior to the auction, Governor Mamo Mihretu announced that such sales would occur bi-weekly. Twelve commercial banks participated in this latest round, a decrease from the 27 bidders in the previous auction, resulting in a weighted average exchange rate of 135.61 Br to the dollar. Despite this slight uptick in the Birr’s value, demand for foreign currency remains pronounced, exceeding the available supply. The first auction conducted in August 2024 recorded a weighted average of 107.9 Br, indicating a 22pc appreciation for the dollar this week. Central bank officials have attributed their decision to conduct bi-weekly foreign exchange auctions to an improved balance of payments, floated by higher export revenues, consistent gains in remittances, and peak gold proceeds. However, the disparity between the auction results and the lowest purchasing rate of 124.01 Br per dollar at the Commercial Bank of Ethiopia (CBE) highlights ongoing shortages, despite a solid foreign exchange reserve. Mamo disclosed that reserves have soared 200pc from levels recorded prior to the deregulation of the forex market, which analysts estimate may bring the total to nearly two billion dollars. The NBE confirmed that another auction will be held in the next two weeks, with the specific date to be announced a day before the sale.

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