- Leading climate activist released from Vietnam jail
- Ethiopians struggle with bitter pill of currency reform
- Sri Lanka votes in first poll since economic collapse
- Feminist author warns of abortion disaster if Trump wins US election
- US city of Flint still reeling from water crisis, 10 years on
- Arsenal's mean defence faces acid test to shut out Man City again
- Late surge lifts Thailand's Jeeno to LPGA Queen City lead
- DeChambeau says PGA's Ryder Cup decision 'just the start'
- Alcaraz defeated on Laver Cup debut
- Postecoglou embraces 'struggle' to make Spurs a success
- Nice hand 'ashamed' Saint-Etienne 8-0 Ligue 1 mauling
- Boeing CEO says ending strike 'a top priority'
- Stock markets mostly fall after Fed-fueled rally
- Harris slams Trump for hypocrisy on abortion as US starts voting
- Academy to host first overseas ceremony to honor young filmmakers
- No doctor necessary: US okays nasal spray flu vaccine for self-use
- Gurbaz, birthday boy Rashid lead Afghanistan to 177-run rout of South Africa
- Former delivery man Baldwin leads star names at PGA Championship
- Trump shooting: Secret Service admits complacency
- Can an ambitious Milei make Argentina an AI giant?
- Haiti, its suffering growing, in 'race against time': UN expert
- Ibrahim Aqil, the Hezbollah elite unit commander wanted by the US
- Chinese forward Cui signs NBA contract with Brooklyn Nets
- US Fed dissenter calls for 'measured' pace of rate cuts
- Guardiola tells players to lead change over workload as Kompany demands cap on games
- Norway limits wild salmon fishing as stocks hit new lows
- Top Hezbollah commander killed in Israeli strike on Beirut
- Rotterdam fatal knife attacker suspected of 'terrorist motive'
- First early votes cast in knife-edge US presidential election
- Top-ranked Swiatek out of Beijing due to 'personal matters'
- Hard-right Reform UK looks to the future after vote success
- Embiid agrees to NBA contract extension with 76ers
- Joshua aims to complete road to redemption in Dubois bout
- World champion Bagnaia sets pace with lap record at Misano
- Biden says 'working' to get people back to homes on Israel-Lebanon border
- Pope criticises Argentina's crackdown on protesters
- Court limits screenings of videos in France mass rape case
- Gurbaz century takes Afghanistan to 311-4 in 2nd ODI
- Central banks face 'difficult balancing act': IMF chief
- McLaren's Norris sets Singapore pace as struggling Verstappen 15th
- Guardiola tells players to lead change over workload fears
- Paris Olympics sports equipment moves to new homes
- 'Happy' Kinghorn relishing life at Toulouse
- Norris sets Singapore pace as Verstappen only 15th
- 8 dead in Israeli strike, source says Hezbollah commander killed
- Germany to bid to host women's Euro 2029
- Portugal brings deadly forest fires under control
- Postecoglou defends Solanke after slow start to Spurs career
- US nuclear plant Three Mile Island to reopen to power Microsoft
- Arteta urges Arsenal to take next step in Man City showdown
Ethiopians struggle with bitter pill of currency reform
In a small fashion store in Ethiopia's capital, Medanit Woldegebriel's dresses have almost doubled in price in the past two months, sending customers fleeing.
"Business is slow," admits a downhearted Woldegebriel, whose shop in the sprawling Merkato market of Addis Ababa imports clothes from Turkey and the United Arab Emirates.
On July 30, Ethiopia took the painful decision to let its currency float freely against the dollar, and the birr lost a third of its value overnight.
The decline has continued since then -- it now takes 112 birr to buy $1, compared with 55 birr before the change.
The government had little choice. Its exports (primarily flowers, tea and coffee) brought in just $11 billion last year, compared to imports (food, machinery and fuel) that cost $23 billion.
On the eve of the currency reform, Ethiopia had only enough dollars to pay for two weeks of imports.
International investors had long argued that pegging the birr to the dollar was unsustainable.
A $3.4 billion aid programme from the IMF and $1.5 billion financing plan from the World Bank were held back until Ethiopia accepted the inevitable and liberalised the currency.
But for regular Ethiopians, a third of whom live below the poverty line of $2.15 a day, the impact has been tough.
Buying a few tomatoes and some school books for his children, one shopper in Merkato said prices were up by a third across the board.
"We have family who live abroad who can send us foreign currency," said Abrish, a civil servant whose name has been changed due to his concerns about criticising the government.
"Without it we could not survive."
- 'Hard to swallow' -
The country of 120 million was already suffering high inflation -- peaking at 30 percent in 2022 -- due to combined impact of the Covid-19 pandemic, the war in Ukraine, a severe drought and its own devastating conflict in the Tigray region.
Tewodros Makonnen Gebrewolde, an economist with the International Growth Center (IGC), admits "the pill is hard to swallow in the short term".
But he says it was the only option.
The reforms will make exports more competitive and include new rules that will give more businesses access to dollars, which were previously reserved for key strategic sectors.
The old restrictions meant many businesses were operating far below full capacity because they were unable to import raw materials and machinery.
"The authorities have promised better access to foreign currency for companies, which will allow them to increase their productivity and thus be able to produce more," said Gebrewolde.
Prime Minister Abiy Ahmed has called the reforms "critical to relieving (foreign currency) shortages, removing constraints to private sector investment and growth."
Closing the gap between the official dollar rate and the black market -- which was around double before the reform -- should also help undermine smugglers, bringing more trade back into official channels, said Gebrewolde.
But after years of economic problems and rising prices, shoppers like Abrish have lost faith.
"I don't see the situation improving," he said.
M.Ouellet--BTB