The National Bank of Ethiopia (NBE) will supply $840 million to commercial banks through foreign exchange auctions in the second quarter of the 2026/27 fiscal year, a 68% increase over its regular first-quarter allocation.

In a statement issued on Tuesday, the central bank said it will hold six bi-weekly auctions of $140 million each, starting on October 13 and running through December 22. The remaining sales are scheduled for October 27, November 10, November 24 and December 8.

The new schedule raises both the size and the frequency of regular auctions. In the first quarter, the NBE planned to supply $500 million through four auctions of $125 million each. Each Q2 auction will be $15 million larger, and the bank has added two sales to the calendar.

Demand in the first quarter was uneven. At the opening auction on August 12, the dollar sold at a record 161.7994 birr after banks bid for $470.17 million against $125 million on offer. The NBE then ran a special sale that matched the entire quarterly allocation in a single day.

Appetite cooled after that. At the September 9 auction, bids totalled $120 million, leaving $5 million of the $125 million offered unsold. It was the first time since the NBE began publishing auction results that banks failed to fully absorb the supply. Analysts attributed the shortfall to a birr liquidity squeeze at banks, cautioning against reading one undersubscribed auction as a lasting drop in FX demand.

The larger Q2 allocation suggests the central bank expects demand to hold up through the end of the calendar year, a period that typically brings heavier import financing needs. Ethiopia is projected to import $25.8 billion worth of goods in 2026/27, with fuel alone accounting for about $6 billion.

The auctions are a central tool of the reform that began in July 2024, when Ethiopia eased controls on the birr and moved toward a more market-driven exchange rate. 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.