Collapse begins on the outside with the weakest and moves to the center and strongest

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Yemeni President Abd-Rabbu Mansour Hadi replaced the central bank governor and deputy governor on Monday amid an unprecedented collapse in the local currency.

The Yemeni state news agency SABA, quoting a presidential decree, said Ahmed bin Ahmed Ghaleb Al-Maabqi had been appointed central bank governor, and Muhammad Omar Banaja his deputy.

War-torn Yemen is witnessing a sharp deterioration in the value of its riyal currency, recording 1,700 to the dollar, an all time low, on the black market on Monday, according to traders and exchange offices. The central bank maintains an official rate of 530 riyal to the dollar.

Yemen is split between an internationally recognised government in the south, backed by a Saudi-led military coalition, and the Iran-aligned Houthi movement that controls most of the north. Each side has a central bank with opposing policies.

The Aden central bank in the south, which has access to international financial markets, has increasingly turned to printing new currency notes to cover the government’s deficit and pay public sector wages, especially those of security and military forces.

This has stoked inflation and drawn criticism in the Houthi-controlled north, where only increasingly tattered old riyal notes are accepted.

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