CBE FX Inflows Surge on Export Growth and Rising Interest Free Banking Demand

Commercial Bank of Ethiopia boosted foreign currency inflows to USD 2.39 billion by mid fiscal year. It's a gain that marks a sharp rebound in hard currency availability and underscores Addis Ababa’s push to stabilize external balances, as exports and remittances regain momentum amid gradual macro reforms and tighter controls on foreign exchange leakage across the formal banking system nationwide markets.

Despite chronic shortages, the inflow jumped over 36 & year on year, with coffee exports delivering the largest share, while interest free banking generated USD 202.3 million. It reflects the rising demand for Sharia compliant products as CBE diversifies funding channels and captures deposits previously routed through informal networks or competing intermediaries across Ethiopia’s fragmented financial landscape.

Executives said interest free services now represent 8.5 % of foreign exchange reserves, a share regulators view as strategic. Meanwhile, policy makers encourage export growth and formal inflows, betting stronger bank intermediation will narrow deficits, improve reserve adequacy, and anchor currency expectations amid a volatile regional and global funding environment over the medium term, according to officials and economists alike.