Abay Bank's Rate Jump Masks a Fragmented Forex Market

Jul 12 , 2026.

The Birr (the Brewed Buck) weakened slightly against the dollar in the six days to July 11, 2026, as the Central Bank stayed out of foreign-exchange auctions for a second week.

However, beneath the calm, banks followed different strategies. The state-owned Commercial Bank of Ethiopia (CBE) raised its quotation, several large private banks let the dollar pass 159 Br, and many barely moved.

Abrupt moves exposed a fragmented, possibly illiquid market in which headline averages masked the extent to which banks priced dollars differently.

Across all banks but the Central Bank, the average buying quotation climbed from 159.09 Br on July 6 to 159.53 Br five days later, and the average selling rate from 162.28 Br to 162.72 Br. The Birr depreciated by about 0.27pc, signalling stability in appearance rather than a stagnant market.

The six-day average was 159.31 Br for buying and 162.50 Br for selling. The 3.19 Br difference reflected the near-universal two percent spread, and because every commercial bank held the same margin, buying and selling rankings were identical.

The market average edged up each day, the average buying rate climbing to 159.17 Br on July 7, 159.27 Br on July 8, 159.39 Br on July 9 and 159.42 Br on July 10 before reaching 159.53 Br on Saturday. The selling average tracked it two percent higher.

Saturday's acceleration was largely an Abay Bank story. Its forex managers raised their buying rate from 159.36 Br on Friday to 162.28 Br the following day, a one-day jump of 2.92 Br. Its selling quotation jumped from 162.55 Br to 165.53 Br, lifting it from mid-table to second behind Oromia Bank.

Without Abay Bank, the industry's average buying rate would have grown by about one cent from Friday, not 11 cents. Its quotation accounted for almost all of Saturday's move, unveiling an attempt to attract foreign currency or a delayed repricing.

The average offered a clearer picture, climbing from 159.22 Br to 159.46 Br, about 24 cents. The market's centre drifted upward even as extreme quotations distorted the average.

The CBE offered a clear example of managed adjustment. It raised its buying rate from 157.81 Br on July 6 to 158 Br the next day, 158.21 Br on Wednesday, and 158.41 Br on Thursday. It increased the rate to 158.63 Br on Friday and held it at that level on Saturday. The cumulative rise was 0.812 Br (0.51pc), while the selling rate added 0.82 Br to 161.8 Br.

That was nearly three times as large as most large private-bank moves, yet the CBE began from a lower base and stayed below the market. Saturday's simple average among non-central-bank banks was 159.58 Br, leaving the CBE about 95 cents lower. The state-owned bank was catching up, not leading.

However, the comparison would be incomplete because the CBE and some private banks pay bonuses on surrendered dollars, which can lift the effective buying price above the posted quotation.

The five large private banks finished above 159 Br by different paths. Awash Bank raised its buying rate by 27 cents, to 159.03 Br; Dashen Bank added 28 cents to 159 Br, crossing the 159 Br threshold only on Saturday; and the Bank of Abyssinia moved to 159.38 Br, also about 28 cents.

Zemen Bank advanced about 27 cents to 160.60 Br, above most rivals. Wegagen Bank kept its buying rate at 159.80 Br and selling rate at 163 Br throughout, as in previous weeks.

Four of the five big - Awash, Dashen, Bank of Abyssinia and Zemen - allowed measured depreciations of about 0.17pc to 0.18pc. Wegagen Bank's fixed rate could signal comfort with its foreign-currency position or a limited appetite to compete for inflows at a higher price.

Oromia Bank remained the obvious structural outlier, quoting 162.73 Br for buying and 165.99 Br for selling every day. On Saturday, its buying rate was 3.21 Br above the industry average and 4.77 Br above the lowest commercial offer. Its four-week freeze revealed a standing position rather than a reaction to the auction’s absence.

Hibret Bank formed a second high-rate group, with its buying price climbing nearly 87 cents to 160.41 Br, following jumps of 37 cents on July 7 and 48 cents on July 9. Its Saturday selling rate of 163.62 Br ranked fourth behind Oromia, Abay, and Zemen banks.

Hijra Bank sat at the other end, with buying and selling rates at 155.49 Br and 158.6 Br on July 6 and 7, before abruptly lifting them to 157.96 Br and 161.12 Br on July 8 and holding them. Despite the 2.46 Br catch-up, Hijra Bank still posted the lowest commercial rates on Saturday.

The gap between Hijra Bank's buying rate and the Central Bank's narrowed from 3.29 Br on July 6 to 0.88 Br on July 11, the smallest in months, and the convergence came from Hijra Bank, not the Central Bank.

The National Bank of Ethiopia (NBE) moved within a narrow band, from 158.79 Br to 158.98 Br on July 9, then eased to 158.84 Br on Friday and held there.

Other banks made catch-up moves too.

Nib Bank raised its buying rate by almost one Birr on July 7, then froze it at 158.8 Br. Sinqee Bank traded near 157.57 Br through July 8, then jumped 1.29 Br on July 9, and Tsedey Bank added about 90 cents that day to 159.58 Br.

These were resets, unlike the daily changes at Awash, Dashen and Zemen. Many banks did not move.

Addis, Amhara, Gadaa, Global, Goh Betoch, Anbessa, Oromia, Tsehay and Wegagen banks, as well as the state-owned Development Bank of Ethiopia (DBE), kept both rates unchanged.

However, Sidama Bank moved by five ten-thousandths of a Birr, while Siket Bank added one cent. Such rigidity is hard to reconcile with a market where every quotation reflects new supply and demand.

Stability without an auction could mean that banks had enough foreign currency, that expectations stayed anchored, or that trading was too small to force a repricing. The forex market appeared in aggregate but fragmented beneath the surface. Competition may also have moved from posted rates to bonuses, relationships and access to allocations.

PUBLISHED ON Jul 12,2026 [ VOL 27 , NO 1367]