A Calm Rates Quote Hides a Split Forex Market

Jul 4 , 2026.

The Brewed Buck spent last week’s foreign-exchange market calmer than the underlying conditions suggested. There was no auction by the National Bank of Ethiopia (NBE) last week, yet the market did not show the gapping that usually signals shortage-driven repricing.

Last week displayed a Birr that barely moved on paper. Beneath the calm, it stayed split between posted stability and scarcity.

The dollar barely moved. The average buying rate increased from 158.67 Br on June 29 to 158.89 Br five days later, a depreciation of 0.22 Br, about 0.14pc, and the average selling rate edged up from 161.73 Br to 161.96 Br. Over the six days, the buying average was 158.79 Br and the selling average 161.86 Br.

The apparent stability was the story. The official market was not frozen, but it was not clearing in the usual sense either. Posted rates unveiled a managed crawl, with banks adjusting screens enough to show movement but not enough to establish a new reference point. Its centre of gravity stayed near 159 Br on the buying side and above 162 Br on the selling side.

By July 4, the average buying rate was 159.03 Br and the average selling rate 162.15 Br, with most banks in a narrow band.

Oromia Bank remained the clear outlier at the top, with its buying rate unchanged at 162.73 Br and its selling rate at 165.99 Br, the highest quoted rates each day. On July 4, Oromia Bank's buying rate was 3.85 Br above the market average, 4.92 Br above the Commercial Bank of Ethiopia (CBE), and 8.24 Br above Tsehay Bank, the lowest quote.

The gap was too large for ordinary positioning. Oromia Bank looked less like part of the cluster than a premium-rate marker, possibly signalling a stronger appetite for inflows.

At the other end, Tsehay Bank was the lowest bidder throughout, at 154.49 Br buying and 157.58 Br selling, 4.39 Br below the market average on July 4. Hijra Bank was second-lowest at 155.49 Br, 3.39 Br below average. Their quotes looked less like competitive rates than low-activity, where the posted price exists but voluntary dollar sellers are scarce.

The Central Bank was an anomaly of a different sort. The National Bank of Ethiopia (NBE) posted a zero spread, its buying and selling rates equal at 158.99 Br on Saturday, about 4.50 Br above Tsehay Bank's buying rate but well below Oromia Bank's top quote. Its zero spread should not be read against commercial margins, because it is not a normal dealer. The posting reads better as a reference signal, and it distorts selling-rate averages, since most banks apply a two percent spread while the Central Bank does not.

The state-owned Commercial Bank of Ethiopia (CBE) moved more visibly than most, its buying rate increasing from 157.01 Br to 157.81 Br, a gain of 0.80 Br, and its selling rate by 0.81 Br to 160.97 Br.

That was one of the sharper changes last week, yet the Bank stayed among the lower-priced, signalling gradual catch-up rather than an aggressive bid. It kept the largest public lender below the private cluster, where the state bank does not set the upper price.

The big private banks varied more, with the Bank of Abyssinia (BOA) moving cautiously, lifting its buying rate by only 0.025 Br to 159.12 Br, barely crossing the 159 Br threshold. Dashen Bank climbed to 158.68 Br and Awash Bank to 158.66 Br, both below 159 Br. However, Awash Bank's July 2 quote briefly showed a 1.81pc spread, the only deviation from the standard two percent, likely a data anomaly, since it returned to the pattern afterwards.

Wegagen and Zemen banks were more assertive last week.

Wegagen Bank moved from 159.62 Br to 159.8 Br, keeping it in the upper tier. Zemen Bank mattered more, for it began at 159.8 Br, crossed the 160 Br threshold on July 1, and ended at 160.28 Br, selling at 163.49 Br, the second bank to trade above 160 Br on the buying side, behind Oromia Bank. This made Zemen Bank the real marginal price setter among the large private banks, as Oromia Bank's rate has remained static for weeks.

The private-bank market fell into four behavioural groups.

Oromia Bank stood alone as the premium outlier. Zemen and Wegagen banks formed the upper active tier, Zemen Bank pushing above 160 Br and Wegagen Bank close behind.

A middle cluster, including Bunna, Global Bank Ethiopia, Goh Betoch, Amhara Bank, Berhan and Addis Bank, sat around 159.58 Br to 159.64 Br with little change. A lower cluster, including CBE, Nib, Siinqee, the Development Bank of Ethiopia (DBE), Coop Bank, Dashen and Awash, stayed around or below the market average, from more conservative pricing or weaker urgency to compete for dollar inflows.

The fixed-rate banks revealed more. Amhara Bank, Berhan, DBE, Gadaa, Global Bank Ethiopia, Anbessa, Oromia Bank and Tsehay showed no change in either rate throughout. In a liquid market, such stability would signal confidence. In the constrained, high-demand forex market, it is more likely to reflect controlled quoting rather than an equilibrium.

The missing auction did not push them to reprice, implying little pressure to chase dollars or rates unresponsive to demand.

The most aggressive adjustments came from banks with room to catch up. Ahadu Bank increased its rate by 0.82 Br, Coop Bank by 0.81 Br and CBE by 0.80 Br. These looked large against the week’s average, but began from lower bases and did not redraw the upper boundary. Zemen Bank did.

The selling side was almost entirely mechanical. With most banks holding a two percent spread, the selling hierarchy mirrored the buying one, from Oromia Bank's 165.99 Br to Tsehay Bank's 157.58 Br. The Central Bank's zero-spread 158.99 Br again sat awkwardly among the low-end quotes, reinforcing its role as a reference.

Last week, the forex market was stable but segmented. Banks were not competing in a disorderly fashion, yet dispersion was wide. On July 4, the gap between the extreme buying and selling rates was 8.23 Br and 8.4 Br, respectively.

It revealed that posted rates carried more institutional signalling than price discovery. Some banks were advertising appetite, others conserving liquidity, and a few posting rates unlikely to attract supply.

Oromia Bank was at the top; Zemen assertive; Wegagen close behind, a thick middle around 159 Br; CBE and smaller banks below average, and Tsehay and Hijra banks at the low end.

PUBLISHED ON Jul 04,2026 [ VOL 27 , NO 1366]