Ethiopia’s Interbank Money Market (IMM) has exceeded 3 trillion birr in cumulative transaction value, marking a major milestone in the country’s ongoing financial-sector reforms and highlighting the rapid adoption of market-based liquidity management among commercial banks.
The achievement comes less than two years after the market was launched in October 2024 on the Ethiopian Securities Exchange (ESX) trading platform. Designed to facilitate short-term borrowing and lending among banks, the IMM has become an increasingly important mechanism for managing liquidity across Ethiopia’s banking system.
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The growth trajectory has been notable. The market recorded its first 500 billion birr in transactions within six months of operation and surpassed the 1 trillion birr mark by September 2025. Cumulative trading reached 2 trillion birr in March 2026 before crossing 3 trillion birr just months later, indicating a significant acceleration in market activity.
The IMM enables commercial banks to trade short-term funds electronically, primarily through overnight and repurchase agreement (repo) transactions. By allowing liquidity to circulate more efficiently among banks, the market reduces reliance on direct funding from the National Bank of Ethiopia (NBE) and supports the development of a more market-driven financial system.
Currently, 26 commercial banks participate in the platform, which operates under the NBE’s Interbank Money Market Directive (MFAD/IBM/03/2024) and its accompanying Code of Conduct.
The market’s expansion aligns with the NBE’s broader transition toward a market-based monetary policy framework. The central bank currently maintains a policy rate of 15 percent, supported by an interest-rate corridor of plus or minus three percentage points. Interbank rates have increasingly reflected these policy signals, with the weighted-average seven-day interbank rate rising to 17.9 percent in February 2026, up from around 16.5 percent a year earlier.
To strengthen monetary policy transmission, the NBE has also introduced regular open market operations aimed at managing liquidity conditions and keeping short-term market rates aligned with its policy objectives.
As the technology provider and operator of the trading platform, the Ethiopian Securities Exchange has played a central role in supporting the market’s growth through standardized trading procedures, transparent price discovery, and real-time reporting systems. The exchange attributed the latest milestone to the NBE’s reform agenda and the active participation of member banks.
The development comes at a pivotal moment for Ethiopia’s financial sector. As the country prepares to welcome foreign banking participation and expands capital market activities through the ESX, including government debt and equity markets, a deep and liquid interbank market is increasingly viewed as a critical foundation for broader financial market development.
The 3 trillion birr milestone is therefore more than a transaction figure, it is an indicator of the growing sophistication of Ethiopia’s financial system and a key measure of progress in the country’s ongoing economic reform program.
