Commercial banks requested over $236 million during a special foreign exchange auction today, vastly outstripping the $100 million made available by the National Bank of Ethiopia (NBE).
The 23rd special forex auction, held on June 9, 2018 (Ethiopian Calendar), highlighted a significant liquidity crunch and high demand for foreign currency within the domestic financial sector. While the central bank injected $100 million into the market to ease pressure, the total demand from the 16 participating commercial banks reached $236.30 million. This aggregate demand more than doubled the actual supply available for the day.
Due to the intense competition, only eight of the participating commercial banks emerged successful to share the allocated foreign currency. The remaining eight banks were unsuccessful as their bids did not align with the clearing rates. This aggressive bidding environment significantly drove up the exchange rates during the session.
The highest bidding rate and the weighted average rate for the day were recorded at 158.0000 Birr per USD, reflecting current market pressures. Additionally, the marginal rate stood at 157.9999 Birr, while the lowest successful bidding rate concluded at 157.9900 Birr per USD.
Economic analysts note that the auction results clearly demonstrate the ongoing dollar shortage within the domestic financial market and the broader economy. To address this gap and stabilize supply, the National Bank of Ethiopia announced that the next forex auction will proceed as scheduled according to its established program.