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Ethiopian Birr Slides Sharply Against the Dollar Across All Markets in October

Ethiopia’s birr weakened across every segment of the foreign-exchange market over the past month, with cash-based bureau rates recording the steepest drop. New data from Dashen Bank, Rooha Forex Bureau, and the National Bank of Ethiopia shows the birr losing between 4% and nearly 10% against the dollar in October, widening the gap between official and cash markets and signaling renewed pressure on hard-currency supply despite policy hints of future stability.

Gemechu Birehanu
3 min read
Ethiopian Birr Slides Sharply Against the Dollar Across All Markets in October

Over the past month, the Ethiopian birr has recorded one of its steepest short-term declines this year, weakening across the official banking market, forex bureaus, and the central bank’s own indicative rate, according to data reviewed by Nigat Post.

For instance, Dashen Bank’s USD selling rate rose from ETB 146.38 on October 6 to ETB 152.51 on November 6, marking a 4.2% depreciation. The National Bank of Ethiopia’s indicative rate showed a slightly sharper drop, moving from ETB 144.47 to ETB 153.87 in the same period a 6.5% fall that signals growing pressure on the exchange-rate regime. birr_trend_animation.gif

But the most pronounced movement appeared in the cash-traded forex bureau market. Rates at Rooha Forex Bureau for example climbed from ETB 161.77 per dollar in early October to ETB 177.28 a month later, a jump of nearly 10%, widening the gap between bureau rates and commercial banks.

Forex bureaus, which are legally restricted to cash-only USD transactions, often react more quickly to on-the-ground demand and diaspora inflows than the banking system and their sharper adjustment suggests rising dollar scarcity in cash circulation.

The divergence between market levels is emerging at a time when the central bank is signaling upcoming policy shifts. In recent interviews, NBE officials including the governor have hinted at a possible future appreciation of the birr, a comment that surprised markets and left traders weighing its implications against the visible month-long slide.

For now, the data points in the opposite direction. Dollar demand remains firm, banks are adjusting rates gradually, and the bureau market usually the first to reflect acute imbalances is moving faster than both.

Economists say the widening spread between the official and cash markets underscores persistent FX shortages and highlights the challenge of steering expectations ahead of any reform.

What happens next may depend less on signals and more on supply: unless more foreign currency enters the system, Forex traders warn that pressure on the birr could remain elevated through year-end.