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Birr Slides Further as Currency Auctions Signal Quiet Capitulation

Dec 16 , 2025

The Birr continued its slide against the Dollar, with the Central Bank posting a weighted average clearing rate of 154.77 Br for dollar in today’s foreign exchange auction.

Thirteen banks obtained hard currency at this rate, which showed a marginal increase from the 154.39 Br recorded two weeks ago. The National Bank of Ethiopia (NBE) sold 50 million dollars in its 12th bi-weekly auction.

All year, these auctions have produced steadily higher clearing rates, a sign of the Central Bank’s push to bring the official exchange rate closer to the parallel market, where the dollar trades at a premium of over 180 Br. It launched this tightening drive back in February with a special auction, offering 60 million dollars. At the time, 27 banks placed bids, and seven banks secured 59.2 million dollars at an average of 135.61 Br to the dollar, marking a sharp drop from the 108 Br range seen the previous year.

In the months that followed, particularly through the third quarter of 2025, auction rates fluctuated as monetary policy officials experimented with how much foreign currency to supply and how to manage bids. On April 17, NBE sold 70 million dollars to 26 banks at a clearing rate of 131.49 Br. Early May auctions, which each offered 50 million dollars to about a dozen banks, closed at 131.71 and 132.96 Br.

By midyear, efforts to soak up excess Birr liquidity and keep inflation in check sent the auction rate higher.

In the seventh auction on June 5, the Central Bank sold 50 million dollars to 12 banks at 134.95 Br, a climb from 133.17 Br in the round before. On October 14, the auction size was ramped up to 150 million dollars. Thirty-one banks bid for dollars, pushing the weighted average rate to a record 148.10 Br, a clear signal that the Central Bank was willing to let the Birr weaken.

The sharp move to 154.39 Br two weeks ago came as 17 banks sought a slice of the 100 million dollars on offer. This auction was part of a half-billion dollar program that the Central Bank said would be split among several rounds, an attempt to meet the surging demand for hard currency while moving the official rate closer to where the parallel market trades.

Over seven weeks, the Birr depreciated by nearly six Birr at auction.

The latest results point to tightening supply and a narrowing field of bidders. While 27 banks bid in February and 26 in April, only 13 banks succeeded in the most recent auction. The Central Bank has kept the average auction size at 50 million dollars, but the concentration of winners revealed that larger banks are absorbing most of the available dollars, leaving smaller lenders to struggle.

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