Ethiopia's economic reform program, supported by an International Monetary Fund Extended Credit Facility arrangement, has demonstrated continued progress through mid-2026, with strong macroeconomic performance and significant foreign exchange reforms.
The fourth review of the program, completed in January 2026, showed positive results across multiple economic indicators. All quantitative performance criteria were met, and most indicative targets were achieved. The IMF praised Ethiopia's macroeconomic performance as having "exceeded expectations," citing robust GDP growth, rising exports, improved domestic revenue collection, growing foreign exchange reserves, and moderating inflation.
Building on this foundation, IMF staff and Ethiopian authorities reached a staff-level agreement on the fifth review of the program in June 2026. Once formally approved, the agreement would give Ethiopia access to approximately $468 million in additional funding. A separate $261 million IMF disbursement was also recorded, reflecting continued international confidence in the reform trajectory.
The National Bank of Ethiopia implemented multiple rounds of foreign exchange reforms from January through May 2026. On February 11, 2026, the NBE announced nineteen amendments to its foreign exchange directive. Services exporters can now hold 100 percent of their export proceeds in a foreign exchange retention account indefinitely, eliminating previous surrender requirements. Authorized banks gained new flexibility too, able to enter forward exchange transactions without requiring NBE approval for each transaction.
The NBE also launched an automated interbank foreign exchange trading platform at the Ethiopian Securities Exchange, aimed at enhancing price discovery and transparency in currency trading.
The fifth review introduced a new binding ceiling on the National Bank of Ethiopia's own foreign exchange market intervention, restricting the central bank's activity to the official auction platform — a constraint intended to enhance market discipline.
The successful completion of the fourth review and the staff-level agreement on the fifth demonstrate that Ethiopian authorities have maintained the policy discipline required to meet IMF benchmarks while implementing substantive structural reforms to the financial system.
