Yemeni riyal’s collapse worsens dire economic situation in country
Date
10/14/2024 4:24:38 AM
(MENAFN) The historic collapse of Yemen’s local currency is exacerbating the already dire human suffering and worsening food insecurity, as citizens struggle to afford basic necessities. The devaluation of the Yemeni riyal has severely impacted the population’s ability to meet their essential needs, further compounding the crisis.
On Saturday evening, the Yemeni riyal hit a record low against foreign currencies, with the exchange rate reaching 1964 riyals per US dollar in Aden, the country’s temporary capital. This sharp decline in the currency’s value has intensified economic hardship across the country.
The continued collapse of the national currency since the start of last week has led to a dramatic increase in food prices in local markets, with prices of imported goods rising by as much as 96 percent. This has made it increasingly difficult for millions of Yemenis to access basic food supplies, as purchasing power weakens and poverty levels surge, now affecting over 80 percent of the population according to international reports.
Economic analyst Wafiq Saleh attributes the riyal's historic collapse to ongoing disruptions in foreign exchange sources, particularly following the halt of oil and gas exports, as well as mounting financial pressures on the government amid rising obligations and reduced public revenues. Saleh also highlighted the lack of strong monetary policies at the Central Bank of Yemen since the resignation of its leadership, which, combined with currency speculation and division caused by the Houthi militia, has weakened the effectiveness of the bank’s policies and fueled black market activities.
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