Yemen Monitor/Newsroom
The Yemeni Rial continued its decline on Thursday, reaching an all-time low against foreign currencies (the US dollar and Saudi Riyal) a day after the commemoration of the glorious 14th of October Revolution.
Banking sources said that “the exchange rate of the US dollar reached 1960 Yemeni Riyals for buying and 1973 Yemeni Riyals for selling in the evening transactions of the temporary capital, Aden, while the Saudi Riyal reached 516 Yemeni Riyals for buying and 518.5 Yemeni Riyals for selling.”
This continued decline comes despite the central bank’s weekly announcement of electronic auctions to sell hard currency to banks and provide part of the market’s needs for foreign currency, but the exchange markets seem to be out of control and have not responded to any measures to curb the rise of foreign currencies against the Yemeni Rial.
The central bank says it has completely stopped financing expenditures from inflationary sources, in addition to preventing the printing of currency and refusing to pump any new quantities of currency into the banking market.
A source at the central bank explained that the bank will not return to the practices of the past by financing government expenditures from inflationary sources, due to their risks and negative effects on the economy and the exchange rate in particular, noting that the growth rate of the monetary base during the period from the beginning of 2022 until today was zero, which means that there was no monetary issuance during the period.
This comes amid a state of stagnation in the activity of the Yemeni Central Bank following the Presidential Leadership Council’s retreat from implementing its decisions to address distortions in the money market, in exchange for UN and international promises to hold consultations on the economic file with the Houthis, which were supposed to be held before the end of September but have not taken place until today.
