Yemen.. Record collapse of the national currency amid government inability to deal with the exchange rate crisis

Today, Saturday, the Yemeni riyal recorded an unprecedented record collapse against foreign currencies, reaching the 2,100 barrier for selling one dollar in the unofficial exchange markets in the temporary capital, Aden, and the rest of the cities under the influence of the internationally recognized Yemeni government.

Banking sources said that the sale of one US dollar reached 2,100 riyals in exchange shops in Aden and the rest of the liberated cities, with a difference of 14 riyals from the purchase.

The sources added that the selling price of the Saudi riyal - the most popular foreign currency - reached 547 riyals, while the buying exchange rate reached 547 riyals.

The rapid collapse of the currency comes despite the recently announced new Saudi deposit of half a billion dollars, the effects of which have not been reflected in the exchange rate.

Economic journalist Wafiq Saleh attributes the decline in the value of the national currency to the failure of the government and the Central Bank in Aden to deal with the exchange rate crisis.

Saleh said in a post on his Facebook page, "The Central Bank's commitment to rigid templates in managing monetary policy and banking activity, despite their incompatibility with the reality and the Yemeni banking environment, does not help stabilize the value of the currency, and also gives speculators and parallel financial networks a large margin to influence the course of the exchange rate in the local market, and manipulate the value of the riyal, in a way that achieves their goals of profit and illicit enrichment."

He added: "Market freedom is not a blank check, and subjecting the exchange rate to the supply and demand mechanism, in its entirety, are not sacred decisions, especially with the continued decline of the currency and the futility of all government measures to achieve banking stability."

Saleh explained that the financial and economic policies of governments are taken in a way that achieves the general economic goals of the country, which are represented in achieving stability, recovery, and stopping problems and crises, regardless of their type and nature. The most important thing is to achieve the general interests of the country and meet the needs and requirements of the population in achieving food security and economic stability, as governments intervene in times of crises to protect citizens and prevent disturbances in the prices of goods and services.

He continued: “Governments devise practical solutions, in line with their reality, to achieve economic stability and meet the aspirations of their people, without being bound by specific procedures, which is what the legitimate government lacks at the present time, as it sees the currency constantly declining and losing its purchasing value, and salaries and wages almost disappearing with this collapse witnessed by the national currency, without there being any specific interventions and positions to prevent crises from occurring.”

The economic journalist warned that the Yemeni government's insistence on dealing with the economic crisis and the problem of the deterioration of the national currency with the same previous methods and scenarios, despite their ineffectiveness and lack of benefit in reviving the value of the currency, is likely to "lead the country to more crises and exacerbate the suffering of the citizen, who is suffering from the flames of inflation and rising prices as the currency loses more of its purchasing value."