Banks Edge Up Dollar Rates as Central Bank Steers a Quiet Slide in the Birr

Nov 16 , 2025.

The foreign exchange market marched to a familiar, if deliberate, beat last week, with commercial banks pushing their dollar rates higher almost in lockstep and the Central Bank acting as a compass and conductor.

From November 10 through November 15, 2025, buying prices at most banks crept from about 150.65 Br to the dollar to 151.49 Br, while selling prices climbed from roughly 153.15 Br to 154.06 Br. At first glance, the changes looked trivial, measured in fractions of a Birr, but stacked together over six days, they charted a clear and centrally guided depreciation of the Brewed Buck.

Abyssinia Bank started the week paying 150.6517 Br for a dollar and finished at 151.42 Br, selling at 153.66 Br on Monday and 154.45 Br by Saturday. Amhara Bank tracked the same slope, lifting its buying rate from 150.69 Br to 151.39 Br and its selling price from 153.71 Br to 154.42 Br. Across the board, the daily increments landed between four-tenths and seven-tenths of a Birr, a pace fast enough to keep up with demand yet measured sufficient to preserve the appearance of stability.

Commercial bank treasurers know the signal. A gentle downgrade today will become tomorrow’s floor. However, none of this happens in a vacuum.

The Central Bank’s own cash rates moved more decisively, jumping from 153.14 Br on November 10 to 154.32 Br a day later, easing to 153.10 Br on November 12, then stepping up again to 154.43 Br and, finally, 155.66 Br on the last two trading days of the week. The progression, more pronounced than that of the commercial banks, functioned as a policy marker, a reassurance to the market that the authorities were consciously resetting the official bias rather than letting volatility run loose.

When the Central Bank’s buying and selling rates rise nearly 2.5 Br in five days, even the most cautious banks know which way the wind is blowing.

However, within the tight choreography, there were stray notes.

ZamZam and Zemen banks also broke formation late in the week, posting buying prices a shade above the peer pack. Their modest upticks signalled a stronger appetite for Green Buck, perhaps to meet corporate clients' demands or to beef up working balances. Oromia Bank, meanwhile, maintained the most expensive selling price across last week, an indication that its forex managers either faced keener buyer interest or preferred to eke out an extra margin rather than chase volume.

Behind the numbers lies a policy strategy shaped by liquidity strains and the federal government’s commitments to the International Monetary Fund (IMF). Officials are pursuing what the market perceives as a managed-float approach where they allow the Birr to drift downward in small and predictable steps, narrow the yawning gap with the parallel market and keep importers and exporters from bolting to the curb-side trade.

By adjusting the official benchmarks daily, the Central Bank pushed commercial banks upward while preserving the fiction of a market-determined rate. The “regulatory corridor” remains wide enough for token competition but narrow enough to prevent one bank from undercutting another. Evidence of the corridor is plain in the clustering of quotes.

On November 15, the Central Bank posted a buying rate of 155.66 Br to the dollar, a full 6.58 Br above the day’s lowest commercial quote from Tsehay Bank at 149.08 Br. The move was a clear signal that the authorities were ready to pay up to drag hard currency into their vaults. In one stroke, the Central Bank leapfrogged Oromia Bank, which had long been the most aggressive bidder, and squeezed private banks' spreads by offering to buy and sell at the identical price: zero margin, pure policy.

Last week exposed fault lines among the Big Five private banks. Abyssinia Bank’s buying rate outpaced Awash Bank (150.50) and Dashen (150.47). Zemen and Wegagen banks stayed at 150.98 Br and 150.86 BR, respectively. The state-owned Commercial Bank of Ethiopia (CBE), inched up to 150.52 Br, sweetening the pot with a “top-up bonus” of 10 Br a dollar, an off-rate inducement that padded customers’ returns without upsetting the headline tariffs.

The elite league split into two camps. Abyssinia and Zemen banks chased the shifting official rate, while Awash and Dashen held back, wary of balance-sheet exposure and regulatory glare. Tsehay Bank’s conservative position looked almost like defiance, yet it may have reflected simple risk aversion. Smaller banks often subdue their bids to avoid ballooning foreign exchange positions they cannot fund. The week’s spread between the Central Bank at the top and Tsehay Bank at the bottom laid bare the tension between policy ambition and market reality.

Commercial banks clustered, but the Central Bank’s benchmark sat above the rest, underlining its dual role as price-setter and market-maker. Industry analysts expect the gap to shrink further as the authorities encourage private banks to move toward the higher band, an effort directed at remittances and export proceeds into official channels and narrowing the gap with the parallel market, where dollars are exchanged at a steeper premium, exceeding 180 Br.

The Birr weakened, but in inches. Banks moved together, except when liquidity or strategy prompted one ahead. The Central Bank signalled, the market obeyed, and a tentative equilibrium held. In the foreign exchange market, policy is choreography, and every step counts.

Investors abroad might mistake the calm surface for market freedom. However, industry insiders are aware that it is engineered. Yet, engineered does not equal artificial if it mirrors the underlying demand for dollars and the authorities’ willingness to let the currency adjust, albeit on their schedule. The running debate is whether gradualism will close the gap with the parallel market faster than pent-up demand can widen it again.

PUBLISHED ON Nov 16,2025 [ VOL 26 , NO 1333]