If you’ve been checking your banking app in Addis Ababa lately, you’ve probably noticed the numbers look a bit like a rollercoaster. Gone are the days when the exchange rate of dollar to birr sat frozen in time, protected by the National Bank of Ethiopia (NBE) like a museum relic.
Right now, as of mid-January 2026, the official rate is hovering around 156.23 ETB per USD.
Just think about that for a second. A couple of years ago, we were looking at 50 or 60. Now? Everything has shifted. But here’s the thing: most people are still looking at the wrong numbers, or worse, they’re waiting for a "drop" that might never come.
The big shift of 2024 and why it still hurts
Honestly, we have to talk about July 2024. That was the "big bang" for Ethiopia’s economy. The government finally pulled the plug on the currency peg and let the Birr float.
It was a mess at first. Prices at the Mercato shot up before the ink was even dry on the NBE directive. But the goal was simple, even if the execution felt like a punch to the gut: kill the black market.
For decades, the "parallel market" was where the real business happened. You’d go to the bank and they’d tell you they had no dollars. Then you’d walk outside and find plenty—at double the price. By floating the Birr, the NBE basically said, "If you can't beat 'em, join 'em."
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The gap between the bank rate and the black market rate used to be 100%. By early 2025, it narrowed to about 15%. Today, it’s even tighter, but it hasn’t totally vanished.
Why is the dollar still so expensive?
There are a few cold, hard reasons why the exchange rate of dollar to birr stays high:
- The IMF Factor: Ethiopia just cleared its fourth review under the Extended Credit Facility (ECF) on January 16, 2026. This unlocked about $261 million. While that sounds like a lot, it comes with strings. The IMF wants a "market-determined" rate, which means no more artificial propping up of the Birr.
- Import Hunger: We still buy way more than we sell. Whether it's fuel, medicine, or those spare parts for your Toyota, we need USD.
- Inflation’s Slow Fade: Inflation actually dipped to 9.7% in December 2025. That’s the first single-digit reading in ages. It’s a milestone, sure, but "lower inflation" just means prices are rising slower, not that things are getting cheaper.
Breaking down the January 2026 numbers
If you’re planning a transfer or looking to fund an import, you need the current spread. As of January 18, 2026, the Commercial Bank of Ethiopia (CBE) and other private banks like Awash or Abyssinia are showing a buying rate of roughly 151.60 and a selling rate near 155.60.
Global mid-market rates—the stuff you see on Google or Xe—often cite 156.23.
It’s important to remember that banks now have more freedom. One bank might give you a slightly better deal than the other because they are actually competing for your dollars now. That’s a huge change from the old "fixed rate" era.
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"The transition to a flexible exchange rate regime has made progress, but the development of a true interbank forex market remains a structural priority." — Summary from IMF Executive Board, January 2026.
What this means for your wallet
Kinda sucks for the average person, right?
If you’re receiving remittances from family in the US or Europe, you’re technically getting more Birr than ever. But that Birr doesn't buy what it used to. A kilo of onions or a liter of cooking oil has already "priced in" the currency devaluation.
For business owners, the "forex queue" at the banks has shortened, but it hasn't disappeared. The NBE has introduced bi-weekly auctions to help, but the demand for dollars is like a thirsty marathon runner.
Is the Birr going to get stronger?
Probably not. Not in the way most people hope.
Currencies in developing economies rarely "gain value" back to where they were. Success in 2026 isn't the Birr going back to 50; it’s the Birr staying stable at 155 or 160 without wild 10% jumps in a single week. Stability is the new "strong."
Surprising facts about the "New Birr"
- Gold is the secret weapon: Gold production has surged, contributing significantly to the industrial sector's 9.2% growth. This is one of the few things actually bringing real USD into the NBE's vaults.
- No more "Surrender": Exporters used to have to hand over a huge chunk of their dollars to the government. Now, they get to keep much more of it. This is why you see more "Made in Ethiopia" labels popping up—there’s actually an incentive to export now.
- The Fuel Subsidy Ghost: The IMF is still pushing for the total removal of fuel subsidies. If that happens, expect the exchange rate of dollar to birr to feel even heavier at the gas station.
Actionable steps for 2026
If you are dealing with USD/ETB transactions, don't just look at one source.
Check the Auction Results. The NBE holds foreign exchange auctions. The results of these auctions give you the most "honest" look at where the market thinks the Birr should be.
Diversify your timing. If you’re a business, don't wait for a "lucky day" where the rate drops. It's better to hedge your costs based on the current 155-157 range.
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Use official channels. With the parallel market gap narrowing, the risk of using "underground" transfers isn't worth it anymore. The banks are actually liquid enough now to handle most retail-level transfers.
The reality of the exchange rate of dollar to birr is that we are in a "new normal." The era of cheap dollars is over, but the era of being able to actually find dollars has finally begun.
Stay updated on the NBE’s weekly bulletins. They are the only ones who truly know how much "buffer" is left in the reserves. For everyone else, it’s about watching that 156-birr mark and planning accordingly.
What to do next
- Monitor the NBE Official Site: Check the "Daily Exchange Rates" section every morning at 9:00 AM EAT.
- Compare Bank Spreads: Look at the difference between buying and selling rates at CBE versus private banks like Dashen or Bank of Abyssinia; private banks are often more aggressive in their pricing to attract sellers.
- Audit Your Import Costs: If you are a trader, recalculate your margins using a baseline of 160 ETB to the dollar to create a "safety buffer" for potential mid-year fluctuations.