By: Birr matrics

Ethiopia’s central bank announced Monday it will auction 60 million US dollars in foreign exchange on February 25, 2025, as officials say surging gold exports and economic reforms boost the country’s reserves beyond expectations.

This marks the second such auction since the reform began. In the first, held on Aug. 7, 2024, 27 of Ethiopia’s 31 commercial banks participated, with successful bids averaging 107.9 birr per U.S. dollar.

The National Bank of Ethiopia (NBE) said the special auction, open to all banks, aims to maintain monetary stability while improving liquidity in the foreign exchange market.

The move follows a major economic reform program launched in July 2024, which has strengthened Ethiopia’s balance of payments through increased exports, remittances, and capital inflows.

Ethiopia’s gold exports have soared to $1.3 billion in the first half of the current fiscal year, driven by economic reforms and a crackdown on illicit trade, officials said.

The National Bank of Ethiopia (NBE), the country’s sole authorized gold exporter, reported that the precious metal accounted for a significant share of export earnings since July 2024.

Record deliveries, fueled by a market-based exchange rate introduced in July, have boosted supplies to the NBE, with the latest six-month figure reaching 1.36 billion US dollars.

While the inflows are a boon, the bank warned they could lead to excessive monetary growth and inflation if not managed. The auction will offload part of the surplus to banks, supporting private sector needs without derailing the NBE’s targets.

“Higher-than-expected foreign exchange inflows are a welcome result of the reform,” the NBE said in a statement. “This operation will ensure our prudent monetary stance is maintained.” The bank added it will track market trends and may hold further sales to safeguard price and external stability.

Bids are due via email between 10 a.m. and noon Tuesday, with results announced at 3 p.m. and settlement completed by day’s end.