Bank of Abyssinia has disbursed 94 mln US dollars in foreign currency between July 8 and August 5, as Ethiopian banks continue to respond to improved foreign exchange availability following the central bank’s recent policy shift.

According to the bank, 32 mln US dollars of the total was allocated for food imports, while 62 mln US dollars was directed to other strategic sectors, including fuel, pharmaceuticals, industrial inputs, and agricultural supplies. The disbursement aligns with guidelines set by the National Bank of Ethiopia (NBE), which requires commercial lenders to prioritise essential imports.

The allocation forms part of Ethiopia’s broader strategy to stabilise critical import flows and reduce pressure on the parallel market, where the exchange rate premium continues to widen. It also brings Abyssinia Bank’s cumulative foreign exchange allocation for the current fiscal year closer to government targets.

Ethiopia has faced chronic foreign currency shortages over the past five years, largely due to declining export revenues, growing demand for imported goods, and increased external debt servicing obligations. In June 2024, the National Bank of Ethiopia floated the birr in a move aimed at liberalising the exchange rate regime and improving transparency in currency allocation.

Since the policy shift, banks have reported higher disbursement volumes. Awash Bank and the state-owned Commercial Bank of Ethiopia (CBE) have previously disclosed their foreign currency allocations under the same framework.

The NBE’s prioritisation directive and the improved availability of hard currency are intended to reduce distortions in the market and support sectors critical to economic recovery.