The National Bank of Ethiopia’s (NBE) 25th foreign exchange auction points to a sharp increase in demand for foreign currency, with banks submitting USD 470.17 million in bids against an allocation of USD 125 million on August 12, 2026.

The latest auction represents a significant shift from the 24th auction held on June 24. Total bids have nearly tripled, rising from USD 160.50 million to USD 470.17 million, while the amount allocated by the central bank increased by only 25%, from USD 100 million to USD 125 million.
As a result, the auction’s bid-to-allocation ratio climbed from approximately 1.6 times in June to 3.8 times in August. In other words, banks collectively sought nearly four dollars for every dollar made available by the NBE, compared with roughly $1.60 previously.

The surge in demand was accompanied by a broader participation base. Twenty-eight banks took part in the latest auction, twice the 14 banks recorded in June. Despite the larger number of participants, only nine banks were successful in both auctions, suggesting that competition for the available foreign currency has intensified considerably.

Exchange rates also moved higher. The marginal rate rose from 157.00 birr per USD to 161.0050 birr, an increase of about 2.5%. Meanwhile, the weighted average rate of successful bids increased from 157.00 to 161.7994 birr per USD, or roughly 3.1%.

The movement in the auction-cleared rates is notable because the increase in demand has been substantially larger than the increase in the amount of foreign currency supplied through the auction. While the NBE expanded the allocation by USD 25 million, additional demand increased by more than USD 300 million.

The higher number of participating banks and substantially larger volume of bids indicate that more banks are turning to the auction to secure foreign currency, while the unchanged number of successful participants points to increasingly competitive allocation.

The results also provide another indication of the evolving price discovery process in Ethiopia’s foreign exchange market. With the cut-off rate moving above 161 birr per dollar and the weighted average approaching 162 birr, the latest auction-cleared rates have moved further upward from the levels recorded in June.

Overall, the 25th auction signals stronger foreign exchange demand, broader bank participation and higher market-cleared rates, while the relatively modest increase in the NBE’s allocation suggests that demand pressures remain considerably stronger than the additional foreign currency supplied through the auction mechanism.