Birr Holds Steady as Banks Close Ranks

Jan 24 , 2026.

The foreign exchange last week displayed tranquillity, although the numbers revealed a market steered more than stirred. The Birr hardly “traded”, as commercial banks marched in lockstep, preserved a two-percent spread and altered prices by mere hundredths of a Birr. Calm still masked a disciplined corridor where rivalry showed up in access and service, not in the rate.

From January 19 through 24, 2026, the centre of gravity barely moved. Ignoring the National Bank of Ethiopia (NBE), the average buying rate among banks was at 152.55 Br for a dollar, while the average selling rate sat near 155.58 Br. Daily shifts were microscopic. Buying crept from about 152.52 Br on January 19 to 152.57 Br by January 24; selling hugged 155.6 Br, save for January 23, when an abnormal quotation dragged the average lower.

For most banks, it was calibration, not repricing, that proved a market obeyed an informal code.

The crucial divide was not between state and private banks but between a hierarchy of reference posters and followers. At the pinnacle sat the Central Bank. It offered the week’s highest buying rate, 155.55 Br early in the week, and did so with a zero spread, buying and selling at the same figure. That is an anchor, not a commercial price. More telling is the glide path. The Bank’s buying quote slipped to 155.54 Br on January 21 and then fell to 155.26 Br from January 22 onward. The decline, though small, signalled deliberate recalibration.

Beneath the Central Bank, Oromia Bank long set the private bank’s ceiling and remained the most expensive seller. Throughout the six days last week, it bid 155.25 Br and asked 158.35 Br. Once the Central Bank revised its own quote, the NBE’s buying rate stood roughly 0.016 Br above Oromia Bank’s, a small inversion that reasserted the regulator’s primacy even when a commercial bank reached for the top.

Zemen Bank formed a distinct second tier. Its buying rate was between 153.55 Br and 153.58 Br, well above the big privates clustered in the mid-152 Br. In a market starved of hard currency, such persistence often signals a bank prepared to pay up to signal availability even if actual volumes are modest. Zemen Bank’s consistency showed how pricing can broadcast confidence more than it conveys size.

Most large private banks acted as shock absorbers. They shadowed the cluster, rarely led and never widened spreads. On January 21, the Bank of Abyssinia was at roughly 152.58 Br, Awash at 152.04 Br and Wegagen at 152.09 Br. The gaps were commercial rounding in a market where a few cents do not tilt incentives when quantity is rationed. More striking is what failed to occur. No one undercut peers meaningfully, while the two percent convention endured.

The state-owned Commercial Bank of Ethiopia (CBE) was a study in administered steadiness. Each day it bought dollars at 151.60 Br, the week’s lowest rate and one unchanged for four weeks in a row. Its selling quote, 154.64 Br, also sat near the floor and, absent the January  23 anomaly elsewhere, was the lowest outright offer. CBE was not chasing headline buzz; it was providing a stable reference for a vast branch network and captive flows. Top-up bonuses, such as 10 Br on every dollar, let banks maintain the posted two percent spread without jolting the corridor.

Dashen Bank supplied the sharpest outlier among its peers. For much of the week, it sat at the lower edge of the private cluster, buying around 151.70 Br and 151.73 Br, sometimes below younger banks. Then on January 23, it posted 151.72 Br for buying and selling, a zero percent spread. Zero margin invites one-way flow, so context suggests a reporting quirk rather than a deliberate gamble.

A subtler deviation appeared on January 24, when Bunna Bank narrowed its spread to 1.74pc. Unlike Dashen Bank’s abrupt zero, its tweak looked tactical, perhaps attracting notes or clearing a small balance. Its rarity proved how tight the corridor is and how swiftly discipline reasserts itself.

Draw the ladder, and the structure emerges. The Central Bank and Oromia Bank occupied the high end, Zemen Bank sat on an upper-middle rung, CBE anchors the bottom, and Dashen and Ahadu banks often quote softly among privates. The bulk clustered between 152. Br and 152.9 Br on the bid and 155 Br and 156 Br on the offer. The pattern appeared to be a coordination equilibrium. No one wanted to widen spreads first, nor appear to pay far above the convention unless compelled.

Across last week, the commercial-bank average ticked fractionally higher while the official anchor drifted lower. The counter-movement fit a managed system, where the cash window stayed orderly, dispersion remained tight, and pressure, if any, showed up not in posted prices but in availability, allocation practices, and the premium brewing outside the formal channel.

The cash-dollar market operated as a tightly governed corridor. Pricing converged, spreads were standard, and deviations were fleeting. The Birr’s posted value changed slowly, not because demand and supply are balanced, but because the mechanism deterred abrupt moves. The real action lies beyond the board, in who gains access to dollars, how much they get and on what unseen terms. For customers and policymakers alike, the decimals on the rate board are the tip of a regulated system built to absorb shocks.

PUBLISHED ON Jan 24,2026 [ VOL 26 , NO 1343]