CBE Raises Dollar Rate by 7 Birr, Adds 10 Birr Remittance Bonus to Counter Black Market











Addis Ababa, Ethiopia – May 28, 2025 — In a swift and strategic shift, the Commercial Bank of Ethiopia (CBE) has increased its official dollar buying rate by 7 birr—from 124.0086 to 131 birr—in under a week. The move marks one of the most significant rate jumps in recent history, as the bank seeks to bridge the widening gap between official and parallel market exchange rates.

To further entice foreign currency inflows through legal channels, CBE is now offering an additional 10 birr bonus per dollar on all remittance earnings. This effectively brings the total payout to 141 birr per dollar, making CBE the most competitive official option in today’s forex market.

At the same time, private exchange shops like Ethiopipa Forex are offering up to 149 birr, while the black market rate has surged to around 157 birr, highlighting the steep discrepancy between regulated and informal markets.

Competitive Pressure Heats Up

CBE’s move is seen as part of a broader effort to redirect foreign currency flows from the informal sector back into the banking system. With remittances contributing over $5 billion to Ethiopia’s economy annually, the 10 birr incentive is likely aimed at capturing a greater share of the diaspora’s transfers.

Implications

Policy Shift Indicators: The sudden 7 birr rate hike may reflect a gradual shift toward a market-driven exchange rate, aligning with reform suggestions from international lenders.

Remittance Channeling: The 10 birr bonus for remittances is a strong incentive to push foreign inflows into the formal system and away from the black market.

Widening Market Gap: Despite the official efforts, the nearly 26 birr gap between CBE and black market rates indicates strong ongoing demand for hard currency.

As Ethiopia navigates economic reforms and foreign exchange shortages, CBE’s actions represent both a tactical response and a broader signal of change in currency management. Whether these efforts will close the black market gap or merely delay deeper structural reforms remains to be seen.