The National Bank of Ethiopia (NBE) sold USD 140 million to commercial banks on Tuesday at Foreign Exchange Auction No. 30. It was the first sale under the central bank’s enlarged second-quarter programme, and bank demand came in above the amount on offer, after two straight auctions that fell short.

Banks bid a total of USD 152.09 million against the USD 140 million available, so the auction was oversubscribed by about USD 12.09 million, or roughly 8.6%. Twenty-nine banks took part and 26 of them received allocations. The marginal (cut-off) rate was 158.1724 birr per dollar. The weighted average rate of successful bids was 160.1072 birr. Bids ran from a low of 153.0000 to a high of 160.9878 birr per dollar.

A turn from September’s weak demand

The result reverses the pattern of the previous two rounds. At Auction No. 29, the central bank offered USD 125 million and banks bid USD 123.49 million, leaving it undersubscribed by USD 1.51 million. The September 9 auction had also gone unfilled, with $5 million of the $125 million left unsold. That was the first time since the NBE began publishing results that banks did not absorb the full supply. Analysts blamed that shortfall on temporary birr liquidity constraints at banks rather than a structural drop in demand for foreign exchange.

Pricing barely moved. Tuesday’s weighted average of 160.1072 birr was slightly below the 160.2297 recorded at Auction No. 29, which suggests a marginally firmer birr in the official auction. The cut-off rate rose by about 0.10 birr. The auction was also less concentrated than in earlier months. In one round earlier this year, only 9 banks won allocations in a USD 70 million auction, with bids topping out at 158.5 birr per dollar.

A larger quarterly programme

Tuesday’s sale opens a significantly bigger supply calendar. The NBE is allocating $840 million in the second quarter of the 2026/27 fiscal year through six bi-weekly rounds of $140 million each, 12% more per auction than the $125 million offered in Q1. The quarterly total is 68% higher than the regular first-quarter allocation. The remaining auctions are set for October 27, November 10 and 24, and December 8 and 22.

The first quarter included heavy intervention. The NBE held a $500 million special auction on August 20, after banks bid $470.17 million at the August 12 auction, nearly four times the $125 million on offer, pushing the average rate to 161.79 birr per dollar.

Reform backdrop

The auctions are part of reforms that followed the July 2024 move to a market-determined exchange rate. These have included changes to export-proceeds rules, forward FX transactions, and foreign currency retention accounts. An automated interbank FX trading platform also launched at the Ethiopian Securities Exchange in January 2026. The programme is backed by the IMF, whose board approved the fifth review on July 1, 2026, releasing about $464 million and bringing total disbursements to roughly $2.65 billion.

The pressure on demand is large. Ethiopia is projected to import $25.8 billion of goods in 2026/27, with fuel alone accounting for about $6 billion.

The next auction, No. 31, is scheduled for October 27 and will test whether Tuesday’s recovery in demand holds as the larger allocations continue.