The National Bank of Ethiopia (NBE) will offer $140 million to commercial banks in a foreign exchange auction on Tuesday 27 October. The sale continues its programme of scheduled dollar sales under the country's market-based exchange rate system.
The central bank announced the auction, its 31st, on Monday 26 October. It forms part of the foreign currency allocation mechanism introduced after the exchange rate reforms of July 2024.
HOW THE AUCTION WILL RUN
Participating banks will submit bids through the CSD-Based Foreign Exchange Auction System between 10 a.m. and noon on the day of the auction. The NBE is scheduled to announce the results at 3 p.m., with settlement expected by the end of the same day.
The programme is designed to supply foreign currency through competitive bidding. Banks submit exchange rate offers rather than receive allocations at an administratively fixed rate.
SECOND-QUARTER SCHEDULE TOTALS $840 MILLION
The 27 October sale is the second scheduled auction of the second quarter of the 2026/27 Ethiopian fiscal year, after the first on 13 October. It follows the central bank's decision to raise the size of its regular auctions to $140 million for the quarter.
The NBE plans six auctions from October through December, each offering $140 million, for a total planned allocation of $840 million. Further sales are scheduled for 10 and 24 November and 8 and 22 December, which the bank said in a statement would be held fortnightly from 13 October.
The NBE announced the calendar on 6 October, continuing its practice of publishing auction schedules in advance. That practice is a transparency measure introduced as part of Ethiopia's broader foreign exchange market reform programme, and the $840 million commitment signals that the NBE intends to remain an active supplier of liquidity as the market develops.
RECENT AUCTIONS AND BIDDING LEVELS
In August, the central bank ran a $125 million auction that attracted bids totalling $470.17 million, with a weighted average exchange rate of 161.7994 birr per US dollar. On 23 September, banks submitted $123.49 million in bids against a $125 million allocation, leaving $1.51 million of the offer unallocated. All 27 participating commercial banks were successful in that sale.
At the 19 May auction, the NBE offered $500 million against total bids of about $1.06 billion. Earlier auctions included sales of $70 million and $500 million.
REFORM BACKDROP SINCE JULY 2024
Ethiopia introduced a market-based foreign exchange regime on 29 July 2024, replacing a system in which the central bank exercised extensive control over the official exchange rate and foreign currency allocation. The reform formed a central component of the government's economic reform programme supported by international financial institutions, including the International Monetary Fund.
Since the transition, the NBE has used auctions as one of its instruments for supplying dollars to the banking system and supporting the interbank foreign exchange market. An automated interbank FX trading platform was launched at the Ethiopian Securities Exchange in January 2026, while the NBE has expanded the information it publishes on auction outcomes.
The reform programme has also included changes to export-proceeds requirements, forward foreign exchange transactions and foreign currency retention accounts. It has widened banks' authority to handle trade-related foreign exchange transactions.