The National Bank of Ethiopia (NBE) has announced a substantial expansion of its foreign exchange auction schedule for the second quarter of the 2026/27 fiscal year, allocating $840 million to be distributed across six bi-weekly rounds starting October 13, 2026.
This move marks a 68 percent increase—or an additional $340 million greater injection—into the banking system compared to the $500 million allocated across four regular auctions in the first quarter. Under the newly released schedule, each auction will provide $140 million every two weeks—representing a 12 percent per-auction increase from the $125 million supplied during regular Q1 sessions. Auction dates are slated for October 13 and 27, November 10 and 24, and December 8 and 22, 2026.
Financial analysts view the expansion as a strategic effort to ease acute hard currency shortages and stabilize market expectations through enhanced transparency.
The increased auction allocation follows Ethiopia’s landmark exchange rate reform, designed to eliminate the price gap between the parallel market and commercial banks while facilitating access to foreign financing.
Since the policy’s implementation, the official exchange rate has shifted from approximately 57 Birr per US dollar prior to the float to around 160 Birr by early October 2026. Despite these adjustments, a substantial gap persists; parallel market rates in Addis Ababa have hovered around 180 Birr per dollar.
The NBE concluded its first-quarter forex auction program on September 13, 2026, successfully supplying a total of $500 million through four regular auctions over a six-week span.
The fiscal year began under immense demand pressure. During the inaugural auction on August 12, 2026, commercial banks submitted bids totaling $470.17 million—nearly four times the $125 million offered—driving the average exchange rate to 161.79 Birr per dollar.
To help alleviate the severe dollar crunch, the central bank also conducted a special $500 million auction on August 20, 2026, drawing $710.14 million in bids at clearing rates ranging between 159.50 and 160.25 Birr. This intervention fostered short-term stability and briefly strengthened the Birr.
