The Ethiopian Securities Exchange (ESX) and the International Finance Corporation (IFC) on 16 May announced a strategic partnership to build up the Ethiopia money market.

According to an ESX announcement: “The project is designed to build capacity across the capital market ecosystem, with a strong focus on developing the interbank money market—an essential component of any robust financial system. As part of the initiative, the project will support the establishment of a national dealers’ association to represent participants in Ethiopia’s local currency and foreign exchange interbank markets.”

The partnership aligns with ESX’s broader goal of developing a centralized, functional interbank market through its licensed trading platform. A well-structured money market is critical to enabling market-based pricing of key short-term financial instruments such as Treasury bills, corporate bonds, and commercial papers. These instruments, in turn, are fundamental to fostering liquidity, transparency, and investor confidence in the capital market.

Dr. Tilahun Esmael Kassahun, CEO of ESX, said: “Capacity building and product development are the next frontier for Ethiopia’s capital market. Through this collaboration with IFC, ESX aims to build the institutional capacity and market infrastructure necessary to support the development of Ethiopia’s broader debt and equity markets.”

The ESX provides the trading platform for the Interbank Money Market which is operated by the National Bank of Ethiopia and launched in October 2024. It trades overnight and 7-day deposits. The number of active trading participants from commercial banks has increased and values traded are soaring. T-bills could be a future target for an active money market.

In September 2023, the IFC signed an agreement with the Ethiopian Capital Market Authority (ECMA) to build markets for local currency bonds and other financing, announced here.

Photo: Addis Ababa, 2023. Photo credit: Tom Minney, ACMN