The National Bank of Ethiopia (NBE) has announced that it will conduct the 12th round of its foreign exchange auction on Tuesday, December 7, 2018, in line with its biweekly auction schedule aimed at managing foreign currency liquidity and stabilizing the exchange rate.
According to the central bank, the total amount to be offered in this round of the auction will be 50 million US dollars, unchanged from the amount allocated during the previous auction. The decision to maintain the same auction volume signals the Bank’s continued cautious approach amid persistent foreign exchange shortages and rising pressure on the Ethiopian birr.
Context: Sharp Depreciation of the Birr
The announcement comes against the backdrop of a significant depreciation of the Ethiopian birr in recent months. During the 11th foreign exchange auction, held on November 23, 2018, the birr weakened sharply against the US dollar. According to reports by Capital Newspaper, the exchange rate reached 154 birr per US dollar, marking a depreciation of more than 11 percent within a two-month period.
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