Ethiopia’s Interbank Money Market (IMM) has surpassed ETB 4 trillion in cumulative transaction volume, a new milestone that shows how quickly commercial banks are shifting to market-driven liquidity management less than two years after the platform opened.

The market began operating in October 2024. The National Bank of Ethiopia (NBE) runs it, and trades are executed on the Ethiopian Securities Exchange (ESX) electronic platform under the NBE Interbank Money Market Directive and Code of Conduct. Banks can lend and borrow with each other overnight or for 7 days, and the rates are set by the market.

A steep growth curve

The pace of growth has picked up with each milestone. Volume was about ETB 135 billion by mid-January 2025, during the pilot phase. It reached ETB 500 billion by early April 2025 and about ETB 834 billion by early July 2025, then passed ETB 1 trillion in September 2025. It reached 2 trillion birr in March 2026, then crossed 3 trillion only a few months later. ESX reported the 3 trillion milestone in early June 2026. By the week of June 15–19, the cumulative total was 3.32 trillion birr. That week saw 66.3 billion birr in overnight deals at 12.416% and 49.8 billion birr in 7-day deals at 15.634%.

That means the market has added roughly another trillion birr in about four months. The jump from 3 trillion to 4 trillion is the fastest single-trillion increase so far.

This is a sharp change from the past. Former ESX CEO Tilahun Kassahun has said interbank trading used to hover around ETB 100 billion a year, and that it has since grown tenfold. In its first year alone, the market traded more than ETB 1 trillion, ten times the initial forecast.

The IMM is central to the NBE’s monetary policy reforms. The central bank set it up to move away from direct monetary controls toward market-based tools that improve price discovery, how liquidity is allocated, and how monetary policy reaches the economy. ESX says the platform gives eligible institutions a transparent and secure place to lend and borrow short-term funds, which spreads liquidity more evenly across the banking sector and supports financial stability.

A wider capital market build-out

The milestone comes as Ethiopia’s capital market continues to grow. In mid-June, weekly equity trading on ESX passed 1 billion birr for the first time. Sidama Bank listed on the ESX Main Market on September 28, 2026. More than two dozen commercial banks were already taking part in the interbank market by late 2025. Development partners are also supporting the market. The IFC and ESX are helping set up a national dealers’ association for the local-currency and foreign-exchange interbank markets.

Observers still advise caution. Some market watchers point out that the securities exchange is still young and needs deeper institutions. Even so, the market’s rapid move from ETB 1 trillion to 4 trillion suggests banks increasingly rely on it as the main venue for daily funding. That makes it an important measure of how Ethiopia’s wider financial reforms are progressing.