Ethiopian birr slides to record low amid FX-auction squeeze
The Ethiopian birr weakened to 163.4 per USD, a record low, even as Ethiopia’s central bank spent about $2.2 billion this year to support the currency and FX auction demand outpaced supply.
The Ethiopian birr weakened to a record low of 163.4 per USD despite the central bank spending about $2.2 billion this year to support the currency.
The birr has remained under pressure since Ethiopia’s major devaluation in 2024 as part of IMF-backed economic reforms, with the latest weakness exacerbated by higher oil and fertilizer prices linked to the Iran conflict.
Rising import costs have increased demand for foreign currency, while weaker remittance inflows from Ethiopians working in Gulf countries have further constrained dollar supply.
The strength of demand was evident at the latest central-bank FX auction, where bids were roughly four times the amount of dollars offered.
The gap is even wider in the parallel market, with the dollar trading at around 180 birr in Addis Ababa, about 15% above the official rate.