The National Bank of Ethiopia (NBE) is set to hold a special foreign exchange auction on February 25th, 2025. The auction is USD 60 million and is open for participation by all deposit money banks.
In July 2024, the Central Bank of Ethiopia removed restrictions on the foreign currency market. This is a critical step in securing funds from the International Monetary Fund and moving forward with a long-term debt overhaul.
The National Bank of Ethiopia said the auction will be recorded to compensate for excessive growth in money offers.
Ethiopia has shown steady and significant improvements due to increased exports, transfers and capital inflows. Especially in the past few months, record-breaking umbrella delivery to NBE (which is the only certified gold exporter in the country) has led to an increase in central bank gold stocks and levels of foreign exchange reserves of NBE¢ Increased due to initial expectations.
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In December 2023, Ethiopia had to deal with high inflation and chronic shortages in foreign currency but has long been the third economy on the continent to slow down debt.
While higher-than-expected currency is a welcome positive outcome of reform, it mustn’t undermine central banks’ fund growth and inflation targets. Given the potential for excessive financial growth and the central bank’s higher foreign exchange position than expected, NBE has decided to sell to banking operations, the central said. bank.
The company ensures that the current prudent currency policy will be maintained and improve the liquidity of the Forex market by conveying some of the higher-than-expected foreign exchange accumulation at the central bank.
NBE will monitor market development in the coming weeks and, if justified, perform additional foreign exchange sales to achieve price and external stability targets.
In this regard, the central bank invited interested banks to offer offers in the time frame and method specified in the contributions of their social media pages.
