NBE Reports Tripling of FX Reserves, Expands Auctions to Stabilize Market and Curb Illicit Trading

Addis Ababa, August 6, 2025 (FMC) – The National Bank of Ethiopia (NBE) has announced that the country’s foreign currency reserves have tripled over the past fiscal year, a development it says is reinforcing its capacity to stabilize the exchange rate and expand access to foreign exchange through formal banking channels.

In a statement on the status of the foreign exchange market, NBE Governor Mr. Mamo Mihretu said the sharp growth in reserves has enabled the central bank to intensify foreign exchange auctions, helping improve liquidity and meet growing private sector demand.

He noted that the positive trajectory has continued into the new fiscal year, with foreign exchange inflows and earnings exceeding initial forecasts. As a result, the NBE has increased the volume of foreign currency offered to commercial banks through regular auctions.

In its most recent auction, 28 banks collectively purchased USD 150 million, with the average clearing rate standing at 138 birr per U.S. dollar. All participating banks received the requested amounts and are expected to begin disbursing the funds to their customers in the coming week.

According to the Governor, commercial banks are now supplying an estimated USD 500 million in foreign exchange to the private sector every month, with the amount rising steadily. He urged businesses to rely on the official banking system for all foreign exchange needs and take advantage of the improved availability.

Mr. Mamo also addressed previous concerns from the business community, including claims that some banks had demanded birr deposits exceeding LC values. He clarified that such practices are no longer in place and encouraged any affected parties to report illegal requests to the NBE for appropriate action.

Reaffirming the central bank’s stance, the Governor issued a strong warning against the use of unlicensed and illicit foreign exchange markets, stating that such actions undermine the financial system and will lead to enforcement measures, including confiscation.

He explained that recent structural improvements in the banking sector and strengthened forex inflows have reduced the justifications for turning to the parallel market. He added that banks are now able to meet demand within a few days for most transactions.

Mr. Mamo also emphasized that travelers and small-scale customers in need of modest amounts of foreign exchange can obtain it directly from authorized forex bureaus and commercial banks without difficulty.

Concluding his remarks, the Governor stated that the NBE’s foreign exchange reform agenda is progressing successfully, and that efforts to combat illicit overseas money transfer networks seeking to manipulate Ethiopia’s financial markets will be intensified.