Tthe National Bank of Ethiopia (NBE) conducted a special foreign exchange auction today, February 21, 2026, resulting in a rare surplus of hard currency. Despite the central bank making a massive $500 million available to the market, commercial banks only absorbed $455.29 million, leaving approximately $44.71 million—nearly 9% of the total—unclaimed.
This auction is the latest in a series of aggressive interventions by the NBE following the historic liberalization of the foreign exchange regime in July 2024. Today’s results have sent a strong signal to the financial sector that the era of chronic, systemic “forex thirst” may be transitioning into a more managed and liquid market environment.
The auction saw active participation from 30 commercial banks, all of which were successful in securing 100% of the funds they requested. This full fulfillment of bids is a stark contrast to previous years, where banks often received only a fraction of their requirements.
The pricing data from today’s session reveals a stabilizing trend in the value of the Ethiopian Birr:
Weighted Average Rate: 153.2503 ETB/USD
Marginal (Cut-off) Rate: 152.0079 ETB/USD
Highest Successful Bid: 154.0000 ETB/USD
Lowest Successful Bid: 152.0079 ETB/USD
When compared to early February auctions where rates cleared around 155.00 ETB, today’s weighted average shows a slight strengthening of the Birr within the official banking window. This suggests that the central bank’s strategy of “flooding” the market is successfully containing rapid depreciation.
Economists and financial analysts in Addis Ababa are closely examining why $44.71 million went unsold. Under the previous regime, a $500 million offering would have been oversubscribed within minutes. Several factors are believed to be at play:
1. Market Satiation and Inventory Levels
Since the start of 2026, the NBE has intensified its bi-weekly auction schedule. Experts suggest that commercial banks have finally built up enough liquidity to meet the immediate demands of their top-tier importing clients. “We are seeing a cooling effect,” noted one senior financial analyst. “The backlog of Letters of Credit (LCs) that plagued the economy for a decade is finally being cleared, leading to more rational bidding behavior.”
2. Tightened Monetary Policy
The NBE has maintained a high-interest rate environment (currently at 15%) and strict credit caps to combat inflation. This means that while banks want ዶላር (dollars), their ability to generate the equivalent amount in Birr to pay for those dollars is limited by the central bank’s own liquidity-mopping operations.
3. Narrowing Parallel Market Premium
With the official rate settling at 153.25, the gap between the bank and the parallel market has narrowed significantly compared to 2025. This convergence discourages speculative hoarding and encourages businesses to use formal channels, further stabilizing the demand curve.
Impact on the Broader Economy
The surplus is expected to have an immediate psychological impact on the market. Historically, the “scarcity mindset” drove businesses to over-order or seek currency on the black market at inflated prices. The fact that the NBE now has more dollars than the banks are willing to buy at current rates effectively kills the scarcity narrative.
For the private sector, particularly manufacturers and pharmaceutical importers, this ensures a predictable supply chain. For the government, it validates the IMF-backed reform package, which recently saw Ethiopia receive a $261 million disbursement following a successful fourth review of its Extended Credit Facility (ECF).
What’s Next?
The National Bank has confirmed that it will continue its scheduled auctions to ensure that market volatility remains low. While the Birr has depreciated by over 20% in the last 12 months, the recent stability within the 150–155 range suggests a “new normal” is being established.
As Ethiopia moves toward mid-2026, the focus will shift from “finding” dollars to “managing” the exchange rate to ensure export competitiveness—particularly for coffee and gold—while keeping a lid on the cost of living for its 120 million citizens.