Brewed Buck Inches Lower While Market Signals Break from Script

Jan 10 , 2026.

The Birr (Brewed Buck) is sliding again, but a casual glance at official screens would barely register motion. During the first week of January, from Friday through Saturday last week, it eased lower in increments so slight they looked like rounding errors.

Buying quotes at commercial banks crept upward by a few tenths of a Birr, selling quotes shadowed them, and the mid-rate inched forward without fuss. No jolts flickered on banks' terminals, and nothing suggested stress.

That tranquillity appears by design. Across the six days, the Brewed Buck's cash market behaved more like a choreographed procession than a marketplace. The centre of gravity settled around 152.55 to 152.85 Br to the dollar on the buying side and 155.60 to 155.95 Br on the selling side. The average neared 152.69 Br for bids and 155.75 for offers, keeping the mid-rate close to 154.22 Br.

The big private five (Awash, Abyssinia, Dashen, Wegagen and Zemen) usually march in formation. As of late, they began breaking step. On Saturday, January 10, Zemen posted a buying quote of 153.23 Br, meaningfully above its peers and signalling a hunger for hard currency. Dashen anchored the floor at 151.26 Br, with Awash only 0.61 Br higher. The Bank of Abyssinia’s 152.26 and Wegagen’s 152.06 Br filled the middle.

In a market where daily moves were measured in hundredths, a two-Birr difference was a deliberate strategy, not statistical noise, a sign that some banks are scrambling for liquidity while others husband scarce reserves.

Rates drifted, but the pecking order churned. Average buying quotes pushed from the low-152s at the week’s start to under 153 by Saturday, while selling quotes converged near 156. Those microscopic steps translated into a 0.32 Br rise in the official mid-rate, roughly 0.06 Br a day. Annualised, the glide implies depreciation of about 14pc to 15pc, fast enough to acknowledge external pressure, slow enough to avoid lighting an inflationary fuse.

Behind the numbers lies a system that functions more like a managed lane than a bazaar. Virtually every bank preserved the two-per-cent spread, uncovering the National Bank of Ethiopia’s (NBE) grip. The Central Bank usually anchors the screens by posting identical bid and offer quotes, a referee signalling direction without touching the ball.

On Saturday, the Central Bank's buying quote, roughly 155.54 Br, eclipsed every commercial bank. Oromia Bank, long the habitual high bidder, had ceded the pole weeks earlier. The Central Bank was willing to pay up to draw export proceeds, remittances and mandatory surrender back into the formal channel. Yet, the position remained calibrated. The NBE’s quote was lower than the level floated in late December, signalling a measured lean rather than a disorderly chase.

At the opposite extreme sat the state-owned Commercial Bank of Ethiopia (CBE). Its 151.60 Br buying rate on January 10 was 2.24 Br higher than a few months ago, an unusually large hop for the dominant lender, yet still almost four Birr shy of the Central Bank. The spread between the top and bottom buyers, about 3.94 Br, would scream fragmentation in a floating market. Here it unveiled stratification, where different mandates, balance-sheet constraints and appetites for the fiscal cost of paying up for dollars.

A second, invisible pricing layer complicates the league tables. Several banks, including CBE, have been dangling a bonus for every dollar surrendered. It increased CBE's effective buying rate from 152 Br to the dollar to 162 Br to the dollar. The sweetener lures hard currency without breaching the formal spread, but it also makes public quotes semi-fictional. A bank appearing middling on the screen may be the genuine high bidder once bonuses are counted, while a competitor posting richer quotes loses clients if it refuses to top up.

Fold those bonuses into the mix, and four classes emerge.

First comes the policy-driven outlier. The Central Bank acts as a buyer of first resort. There are also the persistent high-quote commercial outliers, such as Zemen and Oromia banks, willing to pay above the pack. The vast middle of the corridor was occupied by followers, edging in unison to preserve the two-percent band. Last trails the low-quote tail, led by CBE, opting for rationing over price. The most telling change surfaced within the private elite, where banks that once mirrored one another are now pursuing distinct tactics calibrated to their own balance-sheet pressures and customer flows.

Meanwhile, the parallel market danced to its own beat.

By January 10, the street rate neared 188 Br a dollar, leaving a wedge north of 34 Br and a premium of roughly 22pc. At the current 0.06 Br daily drift, closing that gap would take years, assuming the parallel-market rate stands still, which it rarely does. The gulf explains the popularity of bonuses, the temptation for exporters to delay surrendering receipts and the scramble by importers to rifle every alleyway for currency.

Policymakers appear willing to tolerate the distortions for now. A sharp depreciation could ignite imported inflation and bruise already stretched balance sheets, while a slow crawl buys time for debt talks, subsidy reforms and financial-sector housekeeping. However, market watchers warn that gradualism carries hazards. When the real price of dollars is discovered outside the formal corridor, expectations migrate. Banks respond with off-screen inducements, and the Central Bank finds itself running harder merely to stand still.

The official market is being run as a stabiliser, not a shock absorber, a device to gain breathing room while policymakers juggle external financing gaps and domestic price pressures. Smooth depreciation offers a narrative of control. But control cannot forever outrun price discovery. The longer the Brewed Buck drifts in half-penny steps while the street surges, the more pressure builds outside the corridor.

Last week delivered a mild weakening without drama, yet it also offered a warning that the façade of uniformity is thinning. Should bonuses widen, should the Central Bank keep outbidding commercial banks, or should the parallel rate lurch again, the pace of the crawl itself will become the headline. Until then, Governor Eyob Tekalegn (PhD) is practising a quietly expensive trade-off of depreciation without disorder, managed calm purchases with slowly widening distortions, and a currency whose real value is being discovered far from the glow of official screens.

PUBLISHED ON Jan 10,2026 [ VOL 26 , NO 1341]