Price instability rocks Ethiopia as it reels from foreign exchange rate reforms

Associated Press

ADDIS ABABA, Ethiopia (AP) — The prices on the menu have been erased at a small hotel in a suburb of Ethiopia’s capital. That was no mistake, the waiters said, as businesses in Addis Ababa struggle to keep up with spiraling inflation since the government implemented a flexible exchange rate policy late last month. Since then, the Ethiopian birr has lost 60% of its value against the dollar as of Monday, sparking anxiety as customers are forced to pay more for basic commodities and some businesspeople are hoarding. Ethiopia’s new exchange rate policy was a historic decision in a country where the government for decades fixed the price of foreign currencies, allowing a black market to flourish.