Yemeni riyal... where to?

The national currency has fallen to its lowest level ever against foreign currencies, amid a huge vacuum in monetary policy, the stagnation of the government’s financial reforms, and the multiplication of economic challenges in the country, which, along with the monetary division, constitute the most important factors in the escalation of the Yemeni riyal crisis.

The aggravation of this crisis is driven by the continued disruption of the government’s public resources, especially foreign exchange resources, and the increasing pressures on the state’s public finances, due to the increase in the size of the government’s financial obligations, such as salaries and spending on basic services, compared to the decline in the size of public revenues.

Despite the widening gap in the country's trade balance, as a result of the cessation of oil exports and the expansion of the import process, which ultimately leads to increased pressure and demand for the purchase of foreign currency in the local market, there are also imbalances prevailing in the monetary and banking situations, as a result of the division process caused by the Houthi militia in the Central Bank institution, and the duplication of banking decisions, which was reflected in the weak impact of the monetary policy of the Central Bank in Aden, and the increase in banking activities in the black market.

It is likely that the international factors and variables associated with the escalation of the conflict in the region, the Red Sea, and the ports of Hodeidah have negatively affected the exchange markets, and have led to an increase in uncertainty and economic concerns among the commercial and industrial sectors, due to the complexity of supply chains, which has led to an increase in demand for foreign currency on the black market, and an intensification of the import mechanism, in anticipation of any bleak possibilities in the import process, especially with the bleakness of the scene, and the absence of any indications on the horizon to contain the successive economic crises in the country.

(From the author's page)