ADDIS ABABA – The International Monetary Fund (IMF) has issued a critique of the National Bank of Ethiopia (NBE), stating that recent central bank interventions, coupled with structural market weaknesses, have slowed the country’s progress toward a transparent exchange rate discovery process. Key Findings from the Reform Assessment In its latest economic reform evaluation report, the IMF highlighted significant deviations from the agreed-upon market-based principles. The core issues identified include: • Significant Off-Market Sales: Between July and October 2025, the NBE reportedly sold approximately $1 billion in foreign exchange directly to the Commercial Bank of Ethiopia (CBE) through bilateral agreements rather than competitive market channels. • Policy Inconsistency: The IMF noted that these actions bypass the competitive price-setting mechanism required under Ethiopia’s Homegrown Economic Reform Agenda, which is supported by the IMF’s funding facilities. • Price Distortion: While the NBE conducted these sales at the average daily exchange rate, the IMF argued that this method fails to capture the genuine market demand, thereby obscuring the true value of the Ethiopian Birr. Implications for Economic Stability The IMF emphasized that for Ethiopia’s transition to a market-determined exchange rate to remain credible, the central bank must limit direct interventions. The report suggests that "off-market" deals undermine the transparency and efficiency needed to stabilize the macroeconomy and attract foreign investment. To ensure long-term success, the IMF urges the NBE to allow foreign exchange allocation to be driven solely by competitive market forces. References & Official Sources For further details and to access the full staff reports, visit the following official portals: • IMF Ethiopia Country Page: imf.org/en/Countries/ETH • National Bank of Ethiopia (NBE) Official Site: nbe.gov.et • IMF Staff Country Reports: imf.org/en/Publications/CR Source: International Monetary Fund (IMF) Economic Assessment Report.