Tuesday, 26 October 2021 03:49 GMT

Yemen's local currency continues depreciation


(MENAFN- IANS)

Sanaa, July 30 (IANS) Value of Yemen's local currency has continued to sharply decline against other foreign currencies across the country's provinces controlled by the internationally-recognised government.

Banking sources told Xinhua news agency on Thursday that the exchange rate fell to 1,025 Yemeni riyals against one US dollar in the local markets of the country's southern provinces for the first time, exacerbating the country's already dire humanitarian situation caused by the years-long military conflict.

They said that the devaluation of Yemen's riyal continued despite several financial measures taken by the central bank to curb the economic crisis that made many Yemenis unable to afford basic necessities, including food.

The sources confirmed that the value of Yemen's riyal also recorded a similar sharp decline against all other foreign currencies.

Last week, teams of Yemen's central bank carried out a wide inspection campaign against a number of financial institutions and also targeted speculators of the exchange rates in Aden.

Meanwhile, local citizens in Aden and other major cities complained about the skyrocketing prices of basic commodities due to the sharp foreign currency shortages as the war-torn Arab country imports 90 per cent of its food supply.

The UN World Food Program (WFP) in Yemen warned in December 2020 that the riyal had lost 250 per cent of its value since the start of the war in 2015, which has led to an increase in food prices by 140 per cent.

In 2017, the Yemeni government floated the national currency, a move that economic observers and analysts said was not well-studied a year after the relocation of the central bank to Aden.

The Yemeni economy is continuing to suffer after all exports were halted following a blockade on the country, which was part of a Saudi-led military intervention in March 2015.

The blockade has also restricted imports largely.

All investments, including oil and gas projects, whose revenues used to contribute more than 70 percent of the state budget, were shut down.

--IANS

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