Ethiopia’s central bank has allotted $500 million through a special foreign exchange auction as authorities intensify efforts to stabilise the country’s currency market and ease pressure on businesses struggling with dollar shortages. The intervention was announced by the National Bank of Ethiopia and reported by Reuters.
The auction forms part of broader economic reforms introduced by Ethiopia following its move toward a more market-driven exchange rate system backed by international financial institutions including the IMF and World Bank. Officials said the funds were allocated to commercial banks to support imports and improve liquidity in the foreign exchange market.
Ethiopia has faced persistent hard currency shortages for years due to rising import demand, debt pressures, and limited export earnings, challenges that have affected manufacturers, importers, and investors. Analysts say the special auction is intended to reduce volatility in the birr and improve confidence in the country’s ongoing economic restructuring programme.
The foreign exchange reforms are seen as critical to Ethiopia’s ambitions of attracting greater foreign investment and unlocking additional international financing support. Economists note, however, that sustained improvements will depend on export growth, debt restructuring progress, and continued implementation of macroeconomic reforms aimed at strengthening external reserves and stabilising inflation.
