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Commercial banks have seen their rates surge to more than 100 birr per US dollar from 57 birr in the two weeks since the currency was floated. Meanwhile, the parallel market rate has remained steady, hovering near 115 birr per dollar
The gap between the parallel and official market exchange rates in Ethiopia has dropped to less than 10 percent. This is a significant decline from the 98 percent margin registered in the days leading up to the free float of the Ethiopian forex market on July 28, 2024.
Commercial banks have seen their rates surge to more than 100 birr per US dollar from 57 birr in the two weeks since the currency was floated. Meanwhile, the parallel market rate has remained steady, hovering near 115 birr per dollar.
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The developments come as a relief to government officials who had feared the liberalization would push the parallel rate to new heights. Some analysts had predicted the black market would offer up to 200 birr per dollar if official rates surpassed the 100 birr threshold. –Rates at commercial banks are expected to vary based on economic and non-economic variables.
