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Dollar to Birr Exchange Rate Soars to 135
The official USD to Birr exchange rate soared to 135 during a foreign exchange auction held by Ethiopia’s Central Bank — as the official rate continues to chase the parallel market rate which is now 150.
https://ethiopianpolicy.com/2025/02/25/ ... ate-soars/
February 25, 2025
The official exchange rate of USD to Birr soared to 135 during a foreign exchange auction held by Ethiopia’s Central Bank on February 25, 2025.
According to the Central Bank, 27 banks participated in the auction for the $60 million that was available. The weighted average of the bidding resulted in a 135.6 Birr per USD exchange rate. Going forward, the new official exchange rate will be set to 135.6, as per an official statement from the Central Bank.
In recent weeks,
https://ethiopianpolicy.com/2025/02/10/birr-plunges/ the USD to Birr official exchange rate was hovering at 130, while the parallel market rate hovered at 150. This indicates that the official rate continues to chase the parallel market rate as a consequence of continued political instability, macroeconomic imbalances, inflationary pressure, increasing cost of living, trade deficit, indebtedness, investment and business risks, and the high-cost and low-productivity of capital.
As Figure 1 below illustrates, the parallel market rate, ranging from 148 – 151, continues to exceed the new official rate of 135 — indicating that demand for USD continues to far outstrip supply.
Figure 1: USD to Birr (Parallel Market Rate, February 25, 2025)
Source: ethioblackmarket
Since adopting a free-floating exchange rate regime in July 2024, this is the second time that Ethiopia’s Central Bank has held a foreign exchange auction — the first being in August 2024. During the first auction, the weighted average was 107.9, far lower than today’s 135.6, highlighting continued macroeconomic imbalances, particularly in the foreign exchange market.
Since July 2024, the Birr has now depreciated by 137% vis-à-vis the USD. Put differently, the Birr has lost 137% of its value relative to the USD in the past seven months.
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