A Quiet Forex Market Reveals the Limits of Monetary Reform

The Birr's (Brewed Buck) market passed last week quietly. Beneath it, the week exposed a currency board moving less by price discovery than by administrative habit. With no foreign exchange auction from the Central Bank for several weeks, commercial banks largely kept their rates boxed in. Most boards did not move at all. Those that did shifted by amounts too small to tell a market repricing, but enough to show that banks are testing the edges of a tightly managed corridor. On Saturday, the Central Bank posted 156.74 Br to the dollar, a 0.73 Br drop from the previous week. Inside the mar...

Brewed Buck Stays Calm, But Not Idle. Stability Mirrors Discipline, Not Necessarily Liquidity

In the Forex Market, Stability Masks a Lack of Competition

Last week, the Brewed Buck neither strengthened nor weakened in any meaningful sense. It inched along a carefully managed path, its value against the dollar shaped as much by policy design as by market forces. The anomalies, zero spreads, occasional widening, and shifts in leadership offered glimpses of the tensions beneath the surface. Yet they remained exceptions inside a market defined above all by remarkable consistency. Even though the National Bank of Ethiopia (NBE) did not supply the market through its auction window, the foreign exchange market was a tightly managed corridor in whic...