Birr Nears 160 to the Dollar Despite Central Bank Intervention

The Birr is now within touching distance of a line that foreign exchange dealers, importers and bank treasurers had long treated as psychological. In today’s forex auction, the 160 Br to the dollar threshold was no longer theoretical.

The National Bank of Ethiopia (NBE) allotted half a billion dollars to commercial banks and accepted bids as high as 160.9 Br. The weighted average rate was 159.9 Br, while the lowest successful bid was 157.3 Br, confirming that pressure on the currency remains heavy even when supply is expanded.

The auction today, May 19, 2026, drew bids from 30 of the 32 banks, but almost half received allocations. Demand was roughly twice the available supply, a telling sign that the shortage is not merely a function of small auction volumes. It was the first time a successful bid crossed 160 Br, a level likely to echo through the import market and inside bank treasury rooms, where expectations can quickly harden into pricing decisions.

The sale marks a dramatic escalation in a policy that began cautiously. When the Central Bank opened its biweekly foreign exchange sales in April 2025, its then Governor, Mamo Mehiretu, had said the auctions were intended to “ensure stability of the exchange rate, maintain external stability and provide part of the Central Bank’s foreign exchange accumulation to the private sector”.

The inaugural auction offered 50 million dollars. Later sales usually ranged between 70 million dollars and 80 million dollars. Today’s offer was more than six times the size of the previous 70-million-dollar auction.

It also carries a domestic monetary consequence. At the weighted average rate, the Central Bank is expected to collect nearly 79.5 billion Br from banks, draining liquidity from a system already balancing tight funding, rising client demand, and unresolved foreign-currency backlogs. For the banks, the dollars provide relief but the Birr payments remove cash.

Industry voices trace the renewed pressure to a stubborn mismatch between foreign currency supply and demand. Banks remain burdened by backlogged commitments for fuel imports through the state-owned Ethiopian Petroleum Supply Enterprise (EPSE).

Individuals familiar to the industry assert that although the auctioned currency is unrestricted in use, arrears tied to fuel financing have kept demand elevated. Bankers say importers have been pressing for allocations, while rising oil prices and delayed access to foreign exchange have made the queue harder to clear.

The previous auction, held on February 21, offered 70 million dollars and drew demand reportedly three times the supply. It cleared at a weighted average rate of 153.25 Br, with successful bids ranging from 154.5 Br to 158.5 Br. Today’s auction showed a higher clearing rate and a wider price band.

The spread between 157.3 Br and 160.9 Br revealed that banks were willing to bid aggressively for scarce dollars even after the Central Bank multiplied the volume on offer.

When the Central Bank began the auction, the official exchange rate was 55 Br to the dollar. It created a separate market-clearing rate, consistently far above the official rate and functioning as a quasi-parallel market.

Early clearing prices already revealed pent-up demand from banks after years of rationing. The latest result shows that pressure has not eased, even as authorities have claimed stronger exports, remittances, capital inflows and record gold deliveries as sources of improved reserves.

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