The Yemeni riyal fell last week to a new low of 1,540 against the dollar - in Yemeni government-controlled territories-.
Money traders and media reports said that the Yemeni riyal breached a record low of 1,500 against the dollar for the first time in years, compared to a prior low of 1,400 in July.
Since early 2022, the Yemeni riyal has stabilized at about 1,200 per dollar in government-controlled areas, boosted by the formation of the internationally recognized Presidential Leadership Council, the return of the Yemeni government to Yemen’s interim capital of Aden, and Saudi Arabia’s injection of cash into Yemen’s Aden-based central bank.
The riyal’s new record low occurred just days after the central bank pledged to take all necessary measures to stabilize the economy and limit the depreciation of the national currency.
In a statement issued following a board meeting in Aden last week, the bank stated that it would not use “under any circumstances” inflationary financing to cover government expenses, urging the Yemeni government to effectively collect revenues and deposit them into the bank, address imbalances that drain resources and work on improving Yemenis’ standard of living and services.
To combat the riyal’s depreciation, the central bank closed unlicensed money firms, ordered local banks to send their financial statements to the bank, ordered the replacement of the unofficial remittance system between exchange companies, and organized public auctions for selling the dollar to local traders.
The official riyal exchange rate is 1,540. In early 2015, the riyal was trading at 215 per dollar.