Ethiopia Is Reeling From Foreign Exchange Rate Reforms As A Result Of Price Instability

At a small hotel in a neighborhood of Addis Ababa, the capital of Ethiopia, the menu prices have vanished.

As companies in Addis Ababa struggle to keep up with spiraling prices since the government established a flexible exchange rate policy late last month, the waiters argued it was no mistake.

Since then, as of Monday, the Ethiopian birr has lost 60% of its value relative to the US dollar, causing anxiety among consumers who must now pay extra for necessities and some business owners who are stockpiling.

The menus of the Samra Hotel, located in Bole, a verdant suburb of Addis Ababa, effectively conveyed the state of instability, as each meal has a variable pricing.

According to hotel employee Rahel Teshome, “prices used to be updated bimonthly, but now they are updated daily, if not hourly, to reflect the changing landscape of the market.”

In an effort to avoid penalties from the city authorities, who have threatened to crack down on hoarders, several supermarkets in Addis Ababa are stockpiling products in warehouses and only selling minimal quantities in their stores. Bulk purchasers are required to pay exorbitant costs for goods they are instructed to select from warehouses.

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