ADDIS ABABA, The Ethiopian birr weakened in the latest foreign-exchange auction conducted by the National Bank of Ethiopia, as stronger demand for dollars pushed clearing rates higher compared with the previous sale earlier this month. The marginal rate rose to 157.02 birr per dollar in Auction No. 21, from 155.88 birr in Auction No. 20 held on March 3, signaling continued depreciation pressure in the official market.
The latest auction underscored intensifying demand for hard currency across the banking system. Total bids jumped to $241.5 million, up sharply from $177.1 million in the prior auction, while the central bank maintained a fixed supply of $70 million. The widening gap between demand and allocation highlights persistent FX shortages and suggests that banks are becoming more aggressive in pricing to secure limited liquidity.
Market pricing shifted upward across the entire bid range. The weighted average rate climbed to 157.47 birr per dollar from 155.94, while the highest bid rose to 158.50 from 156.05 in the previous auction. Even the lowest accepted bid increased, indicating a broad-based repricing rather than isolated outliers. Participation expanded to 30 banks from 20 previously, pointing to more widespread demand pressures.
The latest results reinforce a short-term weakening trend in the birr within the auction framework, driven by excess demand rather than an increase in FX supply. With allotments unchanged and competition intensifying, the auction mechanism is increasingly reflecting underlying market scarcity, suggesting further depreciation risks if demand continues to outpace supply in upcoming sales.