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Expectations of further deterioration of the Yemeni riyal and worsening of the economic situation

Yemeni economy: imminent threats of further deterioration


  • The conflict in monetary policies between the central banks in Aden and Sana'a poses a major risk to the financial and banking sector, threatening food security and increasing the risk of hunger.

  • The Yemeni riyal has fallen significantly over the past year, causing food and fuel prices to skyrocket, making it difficult for residents to meet their basic needs.

  • Yemen is facing a worsening humanitarian crisis that requires urgent intervention from the international community and humanitarian organizations to provide support and assistance to the Yemeni people, and avoid widespread famine.


Yemen faces new economic challenges that threaten to exacerbate an already fragile situation. The divergent decisions taken by the two central banks in Aden and Sana'a led to major disruptions in the financial and banking sector, which poses a serious threat to food security and increases the risk of hunger among the population.

Economic and financial challenges pose a serious threat to human security in Yemen. In May 2024, the financial and economic crisis reached its peak due to regulatory measures taken by the Yemeni government and the authorities in Sana'a. These measures directly affected financial sector players, leading to sharp fluctuations in the value of the local currency.

During the year leading up to June 2024, the Yemeni rial saw a 38% depreciation against the US dollar in areas controlled by the recognized government, with an average monthly depreciation of 3%. This decline is expected to continue at a faster pace, which portends serious economic repercussions.

The outlook is not good, as food and fuel prices are expected to rise significantly, reflecting rising transportation costs that make up a large portion of food inflation. Under these conditions, the cost of the basic food basket is expected to reach between US$87 and US$107 by August 2024, representing an increase of at least 6% in areas controlled by the recognized government.

The increasing risks of rising diesel and food prices put the population in a difficult situation, especially with expectations of a decline in imports and a slowdown in internal remittance flows. This situation is complicated by the inability of traders and importers to access sufficient dollars, transfer funds, and obtain credit lines, which negatively impacts commercial import flows and results in a disproportionate impact on southern ports.

Under these circumstances, it becomes necessary for the international community and humanitarian organizations to intervene to provide support and assistance to the Yemeni people. There is an urgent need to find urgent solutions to improve the economic and financial situation and ensure food security for the population, to avoid a humanitarian catastrophe that may be imminent.




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