The International Monetary Fund projected on June 3, 2026, that Ethiopia’s foreign exchange reserves would reach $6 billion over the program horizon. According to the IMF, this increase is driven by sustained reforms, higher gold exports, improved foreign exchange market functioning, and continued external financing under the Extended Credit Facility arrangement.
The rise in reserves to around $6 billion over the program horizon is supported by sustained reform momentum, higher gold exports, improved foreign exchange market functioning, and continued external financing under the Extended Credit Facility (ECF) arrangement, the IMF said.
The International Monetary Fund’s projection of Ethiopia’s foreign exchange reserves reaching $6 billion reflects a significant increase from about $1.4 billion at the end of June 2024, according to IMF staff reports issued on June 3, 2026.
Gross international reserves held by the National Bank of Ethiopia (NBE) increased rapidly from $1.4 billion in June 2024 to $3.6 billion by August 16, 2024, and further to approximately $4 billion by April 2025, as documented in IMF country reports. The Fourth Review report noted reserves had reached $4.4 billion, reflecting a cumulative increase of about $3 billion during the reform period. The IMF projects a further cumulative increase of roughly $2 billion from 2025 levels, culminating in the $6 billion target, contingent on continued reform implementation and programmed external financing.
The ECF arrangement, approved for SDR 2.556 billion (about $3.4 billion), includes quantitative targets on net international reserves accumulation, which underpin the projected rise in gross reserves, IMF officials said. The July 3, 2025, Article IV consultation and Third Review press release highlighted that recent performance included “accumulation of net international reserves, resulting from strong gold exports.” The June 3, 2026, press release on the Fifth Review emphasized that ongoing reforms of the foreign exchange market and monetary policy are expected to further strengthen Ethiopia’s external buffers.
Gold exports have become a key driver of reserve accumulation, according to IMF reports. The National Bank of Ethiopia’s legal monopoly on purchasing domestically produced gold at market-based prices has helped secure and channel export proceeds into official reserves. The adoption of a market-based foreign exchange regime in July 2024, which included floating the exchange rate and removing the requirement to surrender export earnings to the NBE, increased foreign exchange inflows through the formal banking system, supporting reserve growth, IMF sources confirmed.
IMF commentary and an interview with NBE Governor Mamo Mihretu detailed how Ethiopia “comprehensively liberalized foreign exchange transactions and eliminated the requirement to surrender export earnings to the NBE.” This reform led to a rapid convergence between official and parallel market exchange rates, reducing the parallel premium to near zero by early September 2024. The IMF noted that these foreign exchange reforms, combined with interest-rate-based monetary policy and the cessation of central bank financing of the government, contributed to tripling Ethiopia’s foreign reserves within about a year.
The IMF’s July 1, 2026, Executive Board press release completing the Fifth Review confirmed that the review’s successful conclusion allowed further disbursements under the ECF, which directly contribute to Ethiopia’s reserve buildup and are incorporated into the $6 billion projection. Disbursements totaling about $1.873 billion had been unlocked by mid-2025, according to IMF documentation.
External support from the World Bank and other partners also forms part of the IMF’s external financing assumptions that underpin the reserves projection. IMF reports and country documents from 2024 mention this additional support alongside IMF disbursements as factors contributing to improved foreign exchange reserves.
The IMF’s program conditionality includes ceilings and floors on net international reserves, guiding the path of reserve accumulation. The 2025 Article IV and ECF review stressed that restoring external debt sustainability and strengthening external buffers are central objectives of the program. The projected rise in reserves toward $6 billion is linked to medium-term projections where import coverage improves, reducing vulnerability to external shocks.
Risks to the reserve accumulation path, such as security concerns, conflict, and structural constraints in the foreign exchange market, are acknowledged in IMF documents as factors that could affect the pace of reserve growth and the timing of reaching the $6 billion level. The IMF underscores that sustained reform momentum, particularly in foreign exchange market functioning and domestic revenue mobilization, is essential to achieving the projected reserve levels.
An October 2024 external analysis of Ethiopia’s IMF deal described the program’s $3.4 billion financing, beginning with an immediate $1 billion disbursement, and highlighted foreign exchange shortages and high inflation as key macroeconomic challenges. The analysis identified floating the exchange rate, modernizing monetary policy, ending monetary financing of the budget, improving domestic revenue mobilization, restructuring external debt, and strengthening state-owned enterprises’ financial positions as cornerstones of the agreement. It also emphasized that the reserve target path depends on adherence to agreed reforms and that substantial reserve accumulation is both a policy objective and a monitored outcome under the IMF-Ethiopia arrangement.
Ethiopia’s foreign exchange reserves trajectory reflects a combination of policy reforms, external financing, and export performance, with the IMF’s ongoing reviews and program conditionality guiding the medium-term outlook for external sustainability.
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