Ethiopia’s interbank money market continues to demonstrate active liquidity exchanges among financial institutions, with a total of ETB 9.68 billion traded in the week spanning June 30 to July 4, 2025. The latest data reveals a marginal decline in weighted average interest rates, reflecting subtle shifts in the short-term funding dynamics between banks.
During the week, trading took place across two maturity segments:
- Overnight Lending:
- Volume: ETB 3.2 billion
- Number of Trades: 11
- Weighted Average Interest Rate: 12.00%
- Change from Previous Week: -0.07 percentage points
- 7-Day Lending:
- Volume: ETB 6.48 billion
- Number of Trades: 24
- Weighted Average Interest Rate: 14.29%
- Change from Previous Week: -0.88 percentage points
The total traded volume for the week amounted to ETB 9.68 billion, indicating a healthy level of short-term liquidity movement among banks. Notably, the 7-day maturity trades made up the bulk of the week’s market activity, both in terms of volume and number of deals.
The slight decrease in interest rates, especially the significant 0.88 percentage point drop in the 7-day market, may point to improved liquidity conditions or growing confidence among banks to lend to one another at slightly lower costs. The smaller change in overnight rates (down 0.07 percentage points) suggests that the very short-term market remains relatively stable.
These trends could also reflect broader macroeconomic shifts or expectations around monetary policy adjustments, including the ongoing reforms around exchange rate liberalization, interest rate policy modernization, and the evolving regulatory framework for financial markets.
As of this week, the cumulative volume traded in Ethiopia’s interbank money market has reached ETB 833.86 billion, showcasing the increasingly central role the platform plays in balancing short-term liquidity needs.
