Ethiopia Launches First Automated Interbank Foreign Exchange Market

Addis Ababa, January 28, 2026 (FMC) — Ethiopia has launched its first Automated Interbank Foreign Exchange trading market, marking a major step in modernizing the country’s foreign exchange system and advancing ongoing macroeconomic and financial sector reforms.

The market, which became operational today through the Ethiopian Securities Exchange’s automated trading platform, introduces a transparent mechanism in which interbank foreign exchange rates are determined by real-time supply and demand. Authorities say the shift is expected to enhance competitiveness, deepen the foreign exchange market, and strengthen price discovery in the wholesale secondary FX market.

Speaking at the launch event, National Bank of Ethiopia Governor Eyob Tekalign said the platform represents a critical upgrade to the country’s foreign exchange market infrastructure. He said the automated interbank FX system provides a transparent, efficient, and rules-based environment for market participants, adding that it will strengthen market discipline, improve price discovery, and support the broader financial sector reform agenda.

Under the new system, interbank foreign exchange transactions are conducted through real-time competitive bidding among commercial banks, allowing prices to reflect actual market conditions. Officials say this approach establishes reliable benchmarks for foreign exchange pricing while improving the accuracy and credibility of market-based exchange rate determination.

The operation of the interbank FX market is anchored in a comprehensive regulatory framework aimed at safeguarding institutional soundness and market integrity. The framework is primarily governed by the market-based exchange regime established under Foreign Exchange Directive No. FXD/01/2024. Participating banks are also required to comply with the Foreign Exchange Exposure Limits of Banks Directive No. SBB/96/2025, which is intended to mitigate systemic risks within the banking sector.

In addition, market participants must operate in line with the National Bank of Ethiopia’s Foreign Exchange Market Guidelines and the FX Market Code of Conduct, both of which are aligned with international standards. The central bank said it will enforce the transition to the automated interbank market through strict supervisory oversight to ensure the process remains orderly, transparent, and consistent with global best practices.

The market operates on the Ethiopian Securities Exchange’s state-of-the-art trading platform, which includes a dedicated foreign exchange segment. The unified platform is designed to ensure transparency, competitive pricing, and real-time trade execution, while providing all commercial banks with equal access to market information and visibility into market depth. It also supports market price aggregation and enables effective regulatory supervision by the National Bank of Ethiopia.

The central bank said the successful launch reflects strong policy direction, technical leadership, and sustained coordination between the NBE and ESX teams in adapting existing market infrastructure to support interbank foreign exchange trading.

According to the NBE, the new market allows banks to participate in an efficient, transparent, and technology-driven interbank FX environment, enabling foreign currency to move dynamically across the banking system. This is expected to improve liquidity management, promote optimal use of resources, strengthen market discipline, and contribute to a more resilient financial ecosystem.

NBE leadership emphasized that the launch marks another significant step toward modernizing Ethiopia’s financial markets, strengthening foreign exchange management practices, and supporting the country’s broader macroeconomic reform agenda.