In the Forex Market, Stability Masks a Lack of Competition

Apr 19 , 2026.

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 which commercial banks followed one another with near-mechanical precision.

The average buying rate for almost all commercial banks was about 154.05 Br to the dollar, while the average selling rate was near 157.15 Br. The week ended with the industry’s average buying rate easing by 0.06 Br from the previous week. However, the hierarchy of quotes showed small but telling differences.

At the top of the buying range was Ahadu Bank, posting the highest rate at 157.06 Br on April 18, 2026, narrowly overtaking Oromia Bank, which had held that position for weeks but adjusted to 157.03 Br after a three-cent increase. The Central Bank maintained a buying rate of 156.91 Br, keeping it near the top of the range but still below the most aggressive quotes by private banks. At the lower end, Tsehay Bank stayed at 152.99 Br, unchanged for three consecutive weeks, effectively defining the floor of the official market.

The gap between the two extremes, a little over four Birr, captured the full dispersion across two dozen banks.

Selling rates demonstrated the same clustering. Oromia Bank consistently set the ceiling, with its selling rate edging up to 160.17 Br by April 18. At the lower end, banks such as Tsehay and the state-owned Commercial Bank of Ethiopia (CBE) posted selling rates close to 156 Br. The persistence of this narrow band uncovered an industry-wide alignment. The behaviour of the big five private banks - Awash, Abyssinia, Dashen, Wegagen and Zemen - illustrated that alignment. Their postings moved in lockstep, separated only by fractions.

Wegagen held its buying rate steady at 154.59 Br on April 18. Zemen raised its rate by six cents to 154.71 Br, placing it at the upper end of this peer group. Abyssinia and Dashen stayed below the 154 Br mark, with week-on-week changes kept to less than half a Birr. Awash Bank crossed the 154 Br threshold and held that level for a third straight week.

The CBE occupied a middle ground, with its buying rate of 153.09 Br, up by nine cents from the previous week. This placed it above the lowest tier but below the private banks, consistent with its role as a stabilising anchor rather than a price setter. In this rather managed forex market, outliers were rare.

Ahadu Bank’s zero spread, quoting identical buying and selling rates, stood out as a structural anomaly. In a normal commercial market, that would be hard to justify, given that spreads are meant to cover risk and transaction costs. Its persistence over several days suggested a signalling function, perhaps tied to internal liquidity conditions or to a posture aligned with regulatory expectations. The Central Bank’s own zero-spread quotes reinforced the impression of administrative guidance rather than commercial pricing. Berhan Bank offered another deviation. On April 18, it widened its spread to 2.67pc, breaking from the otherwise rigid two percent norm.

The forex market was grouped into three broad tiers. One tier includes the high-quote leaders, including Ahadu Bank, Oromia Bank and, to a lesser degree, the Central Bank. A second tier contains the core cluster, led by the big five private banks and several mid-sized lenders whose rates converge around the industry average. A third tier includes the low-quote anchors, notably Tsehay Bank and, at times, the CBE. However, what stood out was not the existence of tiers but how little distance lies between them.

In a more liberalised market, such segmentation would usually come with wider spreads and sharper price moves. Here, the compression in both rates and spreads reveals a market in which stability objectives outweigh competitive pricing. The absence of Central Bank auctions in recent months adds another layer. In theory, the withdrawal of a major source of dollar supply should have introduced volatility or at least widened spreads as banks competed for scarce foreign currency. Yet, the market kept moving in unison, with only small changes, revealing that the pricing mechanism is being shaped by forces other than immediate supply and demand, possibly administrative direction, moral suasion or coordinated expectations among banks.

The result was a foreign-exchange market that functions less as a platform for price discovery than as a signalling framework. Rates do change, but only within a narrow and predictable corridor. Spreads are maintained, but with little sign of risk-based differentiation. The foreign-exchange market operates under tight administrative control, with limited room for competitive pricing or speculative positioning. Rates were moving, but only inside a narrow corridor, where spreads were effectively fixed.

PUBLISHED ON Apr 19,2026 [ VOL 27 , NO 1355]