Yemen’s currency, the riyal, has sunk to historic lows in recent days, in a new threat to the war-torn country which is already on the brink of famine.
In the government-controlled southern capital of Aden, the dollar is trading at more than 1,000 riyals, the highest rate since the war began in 2014 when Iran-backed Houthi rebels seized the northern capital of Sanaa.
The currency has lost some six percent in the south in the past three weeks. Meanwhile, the riyal trades at about 600 riyals to the dollar in rebel-controlled areas, which stretch across much of the country’s north.
A source at the central bank in Aden said that it was taking action to prop up the currency, amid growing social discontent in areas controlled by the government, which is backed by a Saudi-led military coalition.
“Inspection teams affiliated with the Yemeni central bank, in cooperation with prosecutors and the police, are carrying out a wide-ranging campaign against exchange rate manipulators,” the source said.
Yemenis were already up in arms over the high cost of living in a country where more than 80 percent of the population depends on international aid.
Yemen, one of the world’s poorest countries, is struggling through what the United Nations calls the world’s worst humanitarian crisis.
Famine could become part of the country’s “reality” in 2021, UN Development Programme chief Achim Steiner said in March after a donor conference raised $1.7 billion in aid for the country — just half its target.
The UN has also emphasized that Yemen’s crisis is an “income famine” where food is unaffordable, more than a situation where food is not available.
Yemeni economist Mostafa Nasr said the decline in the riyal has been driven by escalating violence in parts of Yemen, including a fierce battle for Marib city, the government’s last piece of territory in the north.
“A unified monetary policy is a priority to achieve stability for the Yemeni riyal,” Mostafa Nasr added.
The Houthis have established their own central bank in Sanaa and are seeking to strengthen their monetary and financial independence.
