Like many others a building under construction becomes a place where expertise meets hands-on training: a seasoned Chinese construction worker demonstrates finishing techniques to a colleague on site. Ethiopia’s booming construction sector relies heavily on skilled foreign labor to meet ambitious infrastructure goals, turning every building into a classroom for on-the-job learning.
While some cities invest in sleek recycling plants and eco-friendly solutions, this visionary setup around the National Theatre takes waste management back to basics, because who needs fancy machines when you have mountains of bottles and bags stacked like a plastic paradise? Surrounded by lush greenery, this chaotic scene perfectly captures the delicate balance between nature and humanity’s relentless addiction to single-use plastics. It’s almost poetic, if your idea of poetry involves piles of discarded bottles and a daily battle to tame the chaos.
Two Ethio Post delivery men strategically abandon the bike lane to claim prime sidewalk real estate, taking a “much-needed” break from braving the cold on their trusty bikes. The shiny new corridor roads promise smooth rides, yet here they are, apparently staging a roadside protest against actual work. Cold weather or not, the hustle waits for no one, but hey, even heroes need a pause. Pedestrians dodge these kings of the curbside throne, silently wondering if the deliveries will ever resume.
Somali Regional State is moving closer to fiscal independence, with nearly half its budget now funded locally. Officials point to rising agricultural output and stronger tax enforcement as key drivers behind growing revenues. The region plans to cover 32.5 billion Br from its own resources in the upcoming fiscal year. Communication Head Mohammed Abdi credited last year’s tax collection of 18 billion Br, exceeding the 17 billion Br target, to agriculture, khat, and other taxable goods.
The regional council has returned a draft proclamation slated for last month’s approval, sending it back for further review before ratification.
Addis Abeba’s Environmental Protection Authority (EPA) has taken enforcement action against 3,249 manufacturers and service providers found violating environmental standards in the 2024/25 fiscal year.
The violations, ranging from air and noise pollution to improper waste disposal, were identified during inspections of 14,872 businesses citywide. Penalties included warnings and closures, with shutdown orders issued to six plastic factories, 23 block factories, a soft paper plant, 102 nightclubs, 15 garages, an oil manufacturer, a machinery and metalworks facility, and a furniture producer.
EPA Director General Dida Diriba said the Authority collected 1.6 million Br in fines and imposed additional penalties exceeding 120 million Br for breaches such as riverbank pollution. The measures, targeting vehicle emissions, industrial discharges, and waste mismanagement, signal an intensified push to enforce environmental laws and safeguard public health.
Taxpayers under the Ministry of Revenues’ Medium No. 1 branch will have to ditch paper filings and switch entirely to the e-Clearance system for non-audited services starting August 1, 2025. The mandate, routed through the Ministry’s e-filing portal, is pitched as part of a broader push to modernise tax administration and advance the government’s digital agenda.
Officials say the platform lets users process clearance requests remotely via the Fayda national ID, cutting out manual paperwork. A training video and Telegram support group have been set up to smooth the transition. Manual submissions will be off the table, signalling a firm move toward full e-governance in revenue services.
The launch of the 22nd African Fine Coffees Conference & Exhibition (AFCC&E) held at Millennium Hall, drew over 1,200 delegates, featured 53 speakers, and showcased more than 350 coffees. Ethiopia earned over 2.65 billion dollars in annual coffee revenue, shipping nearly 469,000 tons, and aims to exceed three billion dollars in exports in the coming fiscal year.
AFCA Executive Director Gilbert Gatali said the event will showcase exporters’ products and connect traders, with numerous stakeholders expected to attend.
The confrerence will return to Addis Abeba in two years, hosted by the African Fine Coffees Association (AFCA) in partnership with the Ethiopian Coffee & Tea Authority. Ethiopian representative Gizat Worku attributes the comeback to Ethiopia’s status as a top coffee consumer and producer.
The Addis Abeba Roads Authority has produced over 3.1 billion Br worth of road construction materials during the 2024/25 fiscal year through in-house manufacturing. The lineup includes aggregates, sub-base and base course materials, multiple grades of gravel, asphalt, pipes, tiles, and manhole covers.
Officials said the move cut procurement delays and lowered costs tied to supply shortages, accelerating road construction and maintenance timelines. The Authority framed the shift as a strategic push toward self-reliance, planned to deliver infrastructure more efficiently while reducing reliance on external suppliers.
The manufacturing sector has inched past its domestic market share goal for the 2024/25 fiscal year, reaching 44.84pc against a planned 44.76pc. The figure marks an improvement from last year’s 40.8pc.
Manufacturing technology and engineering, along with food and beverage, emerged as top performers, each exceeding 100pc of their targets. Textile and apparel reached 97.4pc, leather and leather products 97.1pc, while chemical and construction inputs closed at 98.9pc.
Officials attribute the gains to government procurement policies that prioritise locally produced goods, reinforced by strict oversight and support measures for domestic manufacturers. The rollout of a new procurement directive and related legal frameworks also bolstered value addition and competitiveness, underscoring what the ministry describes as a policy-driven push to fortify the industrial base.
The Birr (Brewed Buck) spent last week edging lower against the Dollar (Green Buck) in a controlled and policy-led fashion, and one moment set the tone. The National Bank of Ethiopia’s (NBE) foreign-exchange auction on August 5, 2025, did most of the heavy lifting.
Across the full panel of banks, the average buying rate over the six days was roughly 136.29 Br to a dollar, while the corresponding average selling rate was about 138.95 Br. Price discovery was narrow for most banks, although a handful of them provided the movement that mattered. Their prints shaped the tape more than the headline averages showed.
The state-owned Commercial Bank of Ethiopia (CBE) set the floor every day, reclaiming its habitual position as the cheapest counterparty on both sides of the screen. Its buying quote held at 134.45 Br and its selling quote at 137.14 Br throughout the week, effectively anchoring the corridor and offering a reference point for best execution.
At the other end, Oromia Bank finished the week as the most aggressive buyer at 139 Br to the dollar on Saturday, only marginally ahead of the Central Bank’s cash-market buy quote near 138.92 Br. On selling, Oromia also sat at the top of the range for most of the week, peaking above 141 Br, while CBE remained consistently low.
Five banks carried most of the motion in the standard deviation of daily changes. Oromia Bank at about 2.29 Br, Berhan at about 1.91 Br, Siinqee around 0.65 Br, Zemen near 0.57 Br, and Wegagen roughly 0.49 Br. Everyone else clustered below about 0.45 Br. From August 8 to August 9, Siinqee gained 1.50 Br, Wegagen 1.13 Br, Gadaa 0.80 Br, Berhan 0.73 Br, and Goh Betoch 0.70 Br.
A cluster of banks, including the CBE, Dashen, Global, and Hijira, posted identical buying rates all week, signalling that it was an administered and orderly week rather than a volatile one.
Oromia Bank was the swing name. Its buying quote fell from 138.64 Br on Monday to 135.64 Br on Tuesday, then rebounded to 139.10 Br on Wednesday and stayed elevated. Such a V-shaped move against an otherwise quiet tape unveiled a transient pricing or data-capture issue midweek, or a one-off liquidity adjustment, rather than a broad market signal.
Berhan Bank remained stable at 132.47 Br through Wednesday, then jumped to 136.87 Br on Thursday and 137.60 Br on Saturday, indicating a late-week reset that appeared to be a repricing of the pack after several days of lagging behind peers. Siinqee was quiet until Thursday, nudged up on Friday, then posted the single most considerable one-day change with a 1.50 Br rise on Saturday to 136.93 Br.
Wegagen Bank showed a steady upward bias that culminated in a 1.13 Br increase on Saturday to 137.60 Br, more a directional grind than a shock. The median bank moved within a narrow corridor from day to day; outliers explained most of the variance.
The Central Bank conducted nine auctions during the period, with amounts ranging from 40 million dollars to 150 million dollars. The clearing rates in Birr for a dollar show two distinct phases. From February 25, at 135.61 Br, to June 19, at 136.62 Br, the rate moved within a narrow one percent range, revealing a controlled and gradual depreciation.
Auction sizes during this phase were held at 50 million to 70 million dollars, revealing that Governor Mamo Mehiretu was in maintenance mode, satisfying commercial bank demand without signalling policy shifts.
On August 5, he broke formation, demonstrating the Central Bank’s firepower with 150 million dollars on auction, the largest to date, which dwarfed the 50 million dollars average. At a weighted average of 138.25 Br to a dollar, no less than 28 banks bid. The combination of a higher price and a larger allocation is rare for the bank, as it represents a controlled realignment to bring the official auction rate closer to parallel-market conditions.
The auction landed two days before the August 7 cash-market data in which several banks, Siinqee, Wegagen, Gadaa, and Goh Betoch among them, showed notable increases. That sequence revealed a pass-through from the auction to retail buying quotes with a one- to two-day lag. The auction rate last week also matched closely with the median buying rate in that day’s cash summary, where many banks sat in the 136 Br to 138 Br range.
The parallel market complicated the backdrop. Reports of the segment clearing above 170 Br to a dollar last week threatened to unmoor expectations.
The Governor’s warning of confiscations in illicit trade, paired with the display of “firepower” in the auction room and public statements from CBE and Awash that they held ample stock, targeted at compressing that premium without triggering panic. Governor Mamo’s assertion that reserves are at a “high,” without disclosing the volume, delivered the intended signal, even if it left transparency-minded dealers wanting more detail.
The practical read-through for users of dollars is straightforward. A larger and higher-priced auction raises the wholesale cost base, and banks that price off auction liquidity are nudged to increase their retail quotes, especially for cash and small tickets. That is what the final-day tape showed.
Banks that had been sitting below the pack, most visibly Siinqee, Wegagen, Gadaa, Berhan, and Goh Betoch, repriced into the weekend. Many peers stayed flat, unveiling comfortable positions or staggered update cycles rather than stress. Others, such as CBE, Dashen, Global, and Hijira, held their lines and provided reference points for lower rates.
Two outliers deserve attention next week.
Oromia Bank delivered the most erratic tape, with a Tuesday trough and snap-back and a brief move to a spread above four percent before returning to the two-point convention. The Central Bank itself posted non-standard spreads (zero on several days, around 1.24pc on Thursday, and near zero again on Friday and Saturday), an uncommon profile that showed its policy role rather than a commercial pricing posturing, but one that bears watching if it persists.
Salhadin Khalifa knows that every shareholder wants to see rewarding returns. As a founding shareholder in ZamZam Bank since 2021, the country’s pioneering fully fledged interest-free bank, he sees the newly minted capital market as a golden opportunity.
“After all, we want to sell and make a profit,” he said. “Every shareholder wants to make more profit.”
Then comes the pause, and a caveat he has learned to repeat. More than one-third of Ethiopians prefer non-interest banking alternatives, yet the national financial toolkit, from Treasury bills (T-bills) to equity instruments, rests on interest-based principles. That leaves legally recognised interest-free banks sitting on the sidelines of recent monetary and fiscal policy reforms they were told would be for everyone.
“The National Bank needs to implement policies that are Shari’ah-compliant,” said Salahadin.
The faster fully fledged banks become part of the macroeconomic reform, he argues, the better it will be for shareholders such as him.
“It’s better if it does not take time,” he told Fortune. “We need a decision.”
A recent study amplifies his concern. Conducted by Elizabeth Terefe of Admas University, the study warns that interest-free banks remain sidelined, even as policymakers push through macroeconomic reforms and open the capital market. The researcher examined the evolving industry of Islamic finance, with a focus on ZamZam Bank. Demand is rising, she argued, but design flaws and policy gaps hold the segment back.
The launch of the capital market, a milestone in itself, also demonstrated the exclusion. Commercial banks and private investors have begun using new instruments; however, Shari’ah-compliant products are not yet available, thereby excluding Islamic institutions from these channels.
Bankers lend a practical edge to the analysis.
“We’ve discussed this with the Ethiopian Capital Market Authority (ECMA), but there is still a knowledge gap,” said Ali Ahmed, president of Rammis Bank, another fully fledged interest-free bank. “Islamic banks aren’t able to utilise the market like conventional banks can.”
For Salhadin, his stake in ZamZam is about more than dividends. It is about trust.
“We rely on the bank,” he said, stressing that shareholders are not passive investors but people deeply vested in a model built on shared religious and ethical foundations.
Inside ZamZam Bank, the tone is measured, but the message remains the same. According to Melika Bedri, ZamZam’s president, policy reforms introduced by the National Bank of Ethiopia (NBE), such as T-bills and interbank markets, have brought structural change. The problem is their design. Because these instruments bear interest, they are incompatible with Shari’ah-compliant principles and cannot be used by Islamic banks to deploy liquidity efficiently.
ZamZam has stayed active in foreign exchange auctions, using them to stabilise earnings and manage assets. The Bank considers this helpful, but not a substitute for a proper suite of compliant tools. However, Melika sees dialogue is moving. Interest-free banks are sitting with regulators, notably the ECMA and the Central Bank, to help draft new directives that can accommodate Shari’ah-compliant instruments.
The gap, though, remains large. Melika, a former vice president of the state-owned Commercial Bank of Ethiopia (CBE), pointed to the absence of Sukuk (Shari’ah-compliant bonds), Islamic treasury bonds, or dedicated non-interest money markets and says the impact is real.
According to Ali, the Central Bank has signalled its intention to introduce Sukuk within the next six months, and he welcomes the plan. But for him, timing is everything.
“The bank transfers and transactions being made today are already in the billions,” he told Fortune.”We haven’t been able to tap into that as interest-free banks.”
He wants to see closer integration between the interest-free windows operated by conventional banks and the full-fledged Islamic banks.
“If a mechanism had already been established for the windows to work in harmony with us, we could have capitalised on more of these reforms. Every missed opportunity counts,” Ali told Fortune.
The hope is that the new products could draw capital from excluded investors who have had no compliant doorway into the system. Beyond products, an enabling ecosystem matters, that is, well-trained regulators, harmonised legal frameworks and strong public-private partnerships. Melika praised regulators for their openness, attributing recent directives to a deeper understanding of the financial sector’s potential.
“Without proper tools, capital remains idle, curbing intermediation and limiting development contributions,” she said, seeing the current climate as a turning point. “With reforms deepening and infrastructure needs rising, the time is ripe to launch inclusive investment tools.”
From the regulator’s side, the outlook is more upbeat. Sirak Solomon, senior advisor at ECMA, says interest-free banks have distinct competitive advantages, and a more straightforward path is coming into view. They can compete effectively in the capital market by leveraging their unique position in offering Shariah-compliant and ethical financial products that appeal to a growing base of retail and institutional investors. ECMA plans to launch an Islamic Capital Market branding initiative to certify Islamic instruments and give them credibility in the eyes of investors.
“Institutional backing, including the establishment of the Islamic Finance Task Force under the national roadmap, will support product development, regulatory reform, and coordinated industry growth,” he said.
With instruments like Sukuk, they can channel funds into infrastructure and socially impactful projects, mobilising capital in line with an agenda of ethical finance and inclusive growth. ECMA officials disclosed that a broader roadmap is underway to make participation a reality, not simply rhetoric. This includes enabling access to equity markets, mutual funds, and Sukuk offerings, as well as allowing advisory services through dedicated financial subsidiaries.
The Authority, under Hana Tehelku, is preparing to launch a Central Shari’ah Advisory Board to validate products and harmonise rules. In parallel, it is conducting tax and legal reviews to address policy misalignments, eliminating structural inefficiencies, and introducing a pilot Sukuk programme within the next 12 to 18 months as part of a push for a more diversified and inclusive market.
“Interest-free banks are poised for growth, provided they get the right framework,” Sirak told Fortune.
Between the promises and the pilots sit obstacles that bankers describe as everyday barriers. Elisabeth’s research revealed how financial institutions like ZamZam have mobilised deposits and widened outreach, yet misaligned regulations still narrow their options. Double taxation of Shari’ah-compliant contracts and ambiguity in dispute resolution weigh on growth and competitiveness. A particular pinch point is double VAT on asset-based financing, a common structure in Islamic banking.
“When we finance a customer, we first buy the asset in our name and then pass it to the customer,” said Dawit Keno, president of Hijra Bank, another Sharia-compliant financial institution. “We’re taxed twice on the same item. VAT should be exempted.”
Dawit wants the Central Bank to embed parity between models by creating a dedicated interest-free banking department and a national Shari’ah board. Such bodies, he believes, would bring ethical and technical expertise to the table and help shape reforms so they work in practice. He also urged liquidity placements between interest-free banks as informal and inconsistent, a sign, he says, that a system-based approach is overdue.
Regulators at the NBE acknowledge the core problem.
“Islamic banks operate under a different model, and interest-based instruments create major roadblocks,” said Solomon Desta, vice governor.
He confirmed that NBE is developing a regulatory framework that accommodates the logic of interest-free institutions. That acknowledgement matters to bankers, but they still count the cost of delays. Melika puts it in simple terms.
“Structural change has arrived, but its benefits aren’t shared,” she said.
Girum Amha, an economist, widens the lens. Even with better rules, he observed, practice will not always follow. Some bonds are issued by businesses in sectors such as alcohol, which conflict with Shari’ah ethics. That complicates participation in capital-market deals.
“While investment advisory services are emerging, T-bills and other tools remain off-limits due to their structure,” he said.
He proposes interest-free liquidity instruments designed to meet reserve requirements without resorting to interest.
“Substantial sums move overnight to meet reserve requirements,” he said. “Because these transactions are interest-based, Islamic banks are excluded.”
Girum argued for representation in financial policymaking and called the interbank market a missed opportunity.
“To remain resilient, not just present, Shari’ah-compliant institutions need structured access to funding that respects their principles,” he told Fortune.
As interest-free banks stand ready to unlock capital they say has been sitting on the sidelines, the refrain from the people who own them is not hard to understand. For Salhadin and thousands of shareholders like him, the idea is straightforward. He wants a market where finance can be aligned with faith, growth with equity, and reform with inclusion. He says he is not asking for special treatment, but rather a framework that acknowledges how his bank conducts business, and the tools to make that business work within the evolving financial architecture.
The hum of Addis Abeba’s import hubs was muted by frustration as Sultan Yusuf found out last week.
He has spent more than five years importing cars and chemicals. He pulled back in his chair mid-morning. And run the numbers in his head. The foreign currency flow, a sign of improvement under macroeconomic policy reforms, has faltered since late April.
Having more than 23 million Br in his account, more than enough to buy 146,000 dollars, his bank wanted to know how long he would keep it with them after approval for his letters of credit (LC) application. Such practices, he argued, drive traders toward the parallel market.
“You can buy dollars there and move your goods today,” Sultan told Fortune.
He blames several forces for the growing gap between the bank and parallel market rates. The interruption of biweekly forex auctions by the Central Bank for the past two months led many banks to stop issuing LCs. The banks, he noted, were now releasing dollars mainly to earlier applicants, and not all of them.
Sultan also believes the service fees in banks are pushing traders like him to alternative forex sources.
“The standard bank charge is one thing,” he said, “but then you are asked to pay a surcharge. Add that to the exchange rate, and you are almost at the parallel market rate.”
Speculation has worsened the squeeze. Rumours that the official rate could double in September have fuelled demand outside the formal system. Even after last Tuesday’s auction, where the Central Bank floated its largest amount to date, it managed to tame the parallel market rate, slightly lowering it to below 170 Br to a dollar dollar.
“The shortage is far from addressed,” said Sultan.
This tightening comes a year after sweeping reforms were launched in July 2024, when the National Bank of Ethiopia (NBE) dismantled its fixed exchange rate regime and allowed market forces to set the Birr’s value against a basket of major currencies, primarily the dollar.
Governor Mamo Mehiretu cast the historical departure after almost seven decades of controlled exchange market as vital to correcting macroeconomic imbalances and unlocking nearly six billion dollars from the IMF and World Bank.
However, in its report released in mid-July 2025, the IMF cautioned that progress on the forex market liberalisation faces rising risks. The spread between official and parallel rates has widened to about 15pc. High transaction costs, limited interbank liquidity, and a 2.5pc Central Bank commission on foreign exchange trade between banks constrain efficiency.
The IMF urged stronger monetary policy frameworks, greater transparency, and better market functionality despite declining donor support.
The policy reforms eliminated the priority list for forex allocation and allowed exporters to retain more earnings; however, the sudden shift also triggered volatility, widening the gaps between official and parallel market rates.
Frazer Sisay, a medicine importer, is one businessman who is feeling the strain of the volatility. After reforms, requests were cleared within a week. Since May, however, banks have demanded deposits of up to twice the requested amount, with approvals taking months to process.
“It goes to a committee, and you might get approval after one or two months,” he said.
When banks cannot meet demand, importers turn to the parallel market, where rates fluctuate more rapidly than official approvals.
“They say they don’t have it, then later offer more than you asked for,” Frazer told Fortune. “But, by then, the market has shifted.”
Industry leaders dismiss the claim that commercial banks are worsening the gap between official and parallel market rates. They instead blame “illegal intermediaries seeking profit from speculation”.
For Demissew Kassa, secretary general of the Ethiopian Bankers’ Association, his members distribute foreign currency from exports and remittances “as much as possible.”
For Mered Fikire Yohannes, CEO of Pragma Capital, inefficient banking practices and political instability are widening the gap. He criticised what he described as “unfair requirements” for importers to deposit 150pc to 200pc of the requested forex amount. He blamed banks for withholding currency to attract deposits through letters of credit.
“Banks have the dollars but aren’t offering them to the market efficiently,” he said. “When there is political instability, people rush to buy dollars, and that drives up the price. Service fees should not be fixed. Banks should compete, and if needed, lower their rates.”
However, Desmissew dismissed claims that banks overcharge importers for access to foreign currency through their service fees.
“There is no sanctioned practice of overcharging,” he said.
Demissew urged importers with evidence to report it to the Central Bank, which now caps fees at four percent, down from the 12pc to 13pc some banks once charged.
Governor Mamo pledged faster responses “within a few days or weeks.”
“If banks are making such requests, they should be reported to the National Bank,” he said in a public statement last week.
The Governor defended his policy, pledged continued foreign currency auctions, and warned, rather forcefully, against those involved in the illicit foreign exchange market. He reassured the market that the national forex reserve has tripled in the last year, supported by robust inflows. Although he did not disclose the exact amount, IMF figures indicate that the reserve could exceed three billion dollars, covering 2.1 months of imports.
As a demonstration of its firepower, the Central Bank floated 150 million dollars on August 5, with 28 banks bidding at a weighted average of 138 Br.
Several commercial banks disclosed their foreign currency disbursements following the auction last week. Bunna Bank reported releasing 47.7 million dollars from early July through the first week of August this year. The Bank of Abyssinia (BoA) disbursed 94 million dollars during the same period. Wegagen Bank provided over 70 million dollars, while Dashen Bank led with 112.6 million dollars disbursed in July alone.
An analysis of the Commercial Bank of Ethiopia (CBE), Awash Bank, a foreign exchange bureau, and the parallel market revealed a distinct shift between July 28 and August 8. Most banks edged rates upward, with Awash Bank by 1.47 Br, the Central Bank by 0.90 Br, while the CBE held steady. The parallel market plunged 19.38 Br, narrowing the gap; and Roha Forex fell 0.28 Br.
According to Olane Tabor, chief operating officer of Awash Bank, multiple pressures widen the gap. Money transfer operators are raising fees, some in defiance of Central Bank rules, and the flexible pricing of forex bureaus pulls rates up.
“Because these bureaus are self-regulated and often charge higher rates than commercial banks, parallel market traders peg their rates to those prices, or exceed them,” she said.
Tightening Franco Valuta processes push traders back to the parallel market. Awash allocated 125 million dollars to 748 customers in July and plans to disburse 110 million dollars in August.
Far beyond the monetary policy arsenal under his belt, Governor Mamo resorted to an administrative tool.
“We will go as far as confiscating their money,” Mamo warned in a statement broadcast on the state and affiliated media last week.
According to the Governor, the Central Bank has a “strong, technology-assisted system” to monitor illegal foreign exchange activities and is pursuing agents operating from abroad, especially those based in Dubai.
He banned four American-based money transfer service providers – Shgey, Adulis, Ramada Pay (also known as Kaah Express), and TAAJ – accusing them of violations that threaten the financial system. Central Bank authorities blamed these companies for operating without regulatory oversight and were allegedly involved in activities that “distorted exchange rates and undermined financial stability.”
The Central Bank’s regulatory focus has also extended beyond banks. In August 2025, it issued a stern public warning to the Ethiopians in the diaspora against using unlicensed remittance operators. It urged the diaspora to use only licensed services, warning that unregulated channels could destabilise the market and harm the national economy.
For Moges Eshetu, managing director of Roha Forex Bureau, shortages come from the auctions that were briefly interrupted, seasonal demand from outbound travellers, and dwindling investor confidence. He pointed his fingers at media promotions for overseas property acquisitions, particularly in Dubai.
“It isn’t possible to buy a house in Dubai with legally transferred funds,” he told Fortune. “People resort to illegal channels.”
Moges also cited rising foreign exchange demand from companies paying foreign expatriates, calling it “a form of exploitation,” and urged larger reserves and incentives for exporters.
Temesgen Worku, a senior CBE staff member, acknowledged that suspended auctions could contribute to shortages and pushed traders toward the parallel market.
“There was a shortage due to the lack of auctions,” he said, adding that CBE had worked to meet demand, “even during the shortage.”
He credited the resumption of the auctions with helping to steady the market. The CBE announced last week that it has expanded foreign currency allowances to ease access for travellers. Business travellers can now buy up to 15,000 dollars, personal travellers 10,000 dollars, and those seeking medical treatment abroad an additional 10,000 dollars.
According to Governor Mamo, auction-sourced foreign currency will boost banks’ capacity and stabilise prices. He disclosed that the supply of half a billion dollars to the business community has doubled from a year ago and is set to grow, with additional support “as needed” for travellers and small buyers through banks and forex offices.
Sidama Bank also reported supplying one million dollars to customers in July and plans to distribute four million dollars in August. Its President, Taddese Hatiya, believes the shortage has been aggravated by income earned informally, bypassing the formal market.
“It’s traded on the parallel market, which both devalues the currency and creates shortages,” he said.
As part of a crackdown, the Financial Intelligence Service (FIS) has suspended bank accounts belonging to 138 individuals suspected of engaging in illegal foreign currency transactions. Identified through ongoing surveillance, they face charges for operating outside the formal system and bypassing legal channels.
Mered proposed cutting the 2.5pc commission the NBE charges banks at auctions, capping total fees to importers at three percent, and publishing auction allocations and bids.
“The NBE should monitor whether banks are releasing their dollars and providing services without irregularities,” he said.
He also urged banks to develop independent sources of foreign currency.
“Overreliance on Central Bank auctions could undermine the reserves, which should be used on rainy days,” he said.
He warned that without competition in forex fees, attracting deposits could become difficult as the Central Bank moves toward a new monetary policy framework in September, linking lending rates to market conditions and customer risk.
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