Forex Counters Splinter as Central Bank Tightens Grip

Nov 8 , 2025.

In a telling departure from their typically synchronised moves, foreign exchange counters slipped into a quiet fragmentation last week, with private banks pulling in diverging directions while the Central Bank reasserted itself as the market’s most aggressive forex buyer.

The Brewed Buck’s average trading range, depreciated by a modest 0.54pc, with average cash buying and selling rates closing the week at 149.89 Br and 152.89 Br, respectively. The spread widened by 0.01 Br from the week prior, but the directional shifts underneath were more nuanced.

Beginning at 149.26/152.26 Br on Monday, quotes rose only slightly on Tuesday and remained flat on Wednesday. By Thursday, however, a sharp 0.39 Br hike, tied to mounting parallel market demand breaching 180 Br, jolted the official counters into movement. Two incremental rises on Friday and Saturday rounded out the week, with the bid climbing to 150.07 Br and the ask to 153.08 Br.

But beneath the seemingly mild surface shifts, strategic divergence among major players revealed a market testing its boundaries.

The surface calm masked tension among the private “big five” (Awash, Abyssinia, Dashen, Wegagen and Zemen), whose postings usually set the tone for everyone else. On Saturday, Abyssinia Bank quoted 150.19 Br and Dashen 150.26 Br. Awash, Wegagen and Zemen clung to roughly 149.70 Br. Those few cents matter in a system where the regulator caps spreads at two percent.

Oromia Bank, traditionally the pace-setter, made waves of its own. Its 153.02 Br buying quote sat four cents below the Central Bank's 153.07 Br. It was the regulator, not a commercial bank, that offered the best deal in town. At the other extreme, Sinqee Bank paid 147.50 Br, leaving a 5.56-Br gulf between the market floor and ceiling. The state-owned Commercial Bank of Ethiopia (CBE) threaded the middle, posting 148.76 Br on the bid while dangling a 10-Br cash-counter bonus to lure remittance dollars.

However, CBE's headline rates barely moved, consistent with a dual charter that obliges it to stabilise the sheet even as it competes for deposits.

Viewed by behaviour rather than ownership, four archetypes emerged.

The proactive leaders (Abyssinia, Dashen and often Oromia banks) pushed quotes fastest, signalling a readiness to pay up. Average-setters (Awash, Wegagen, and Zemen) maintained near the mean, effectively anchoring smaller banks. Conservative players (Sinqee and usually CBE) sat low. The Central Bank occupied a category of its own, functioning simultaneously as a trader and a referee.

Abyssinia Bank’s bid rose 1.26 Br through the week. So did Dashen’s by a similar margin. Oromia Bank added 1.17 Br and Lion 0.78 Br. Berhan Bank climbed 0.67 Br, a stretch that included a one-day experiment with a zero-percent spread on Friday. CBE edged up 0.35 Br, and the state-owned Development Bank of Ethiopia (DBE) barely budged.

However, numbers alone do not explain the pressure, because a second market is always in play. The informal market was paying close to 30 Br above bank counters last week. That premium, stubborn all year, forms a gravity field that tugs official rates skyward a few cents at a time.

Several banks, including CBE, try to counter the pull with bonuses, flat payments of 10 Br to the dollar for walk-in customers. For small remitters, the sweetener can outweigh headline quotes, but corporate treasurers chasing six-figure letters of credit care more about raw price and speed, keeping demand for hard currency brisk even when the rate inching is orderly.

The Central Bank’s move to quote both bid and ask at 153.07 Br, wiping out its own spread, is widely read as an attempt to siphon export proceeds back into formal channels. Firms give up the two-percent premium they could command elsewhere, but they secure instant settlement and regulatory goodwill. Success depends on whether exporters view 153 Br as fair compensation. Importers rush payments when they foresee a weaker Birr; exporters delay conversions if they expect better terms later.

PUBLISHED ON Nov 08,2025 [ VOL 26 , NO 1332]