As the Yemeni rial’s exchange rate dropped again, President Abdrabbuh Mansur Hadi stressed that the Central Bank of Yemen (CBY) and the official government must take firmer measures to salvage the war-torn nation’s deteriorating economy.
In the interim capital, Aden, the riyal shed more of its value after only about five days of a slight improvement in its price against foreign currencies, banking sources told Asharq Al-Awsat.
Sources confirmed that the Yemeni rial traded at 1,035 for the dollar in government-controlled areas but was exchanged at a rate of 600 Yemeni rials to the dollar in Houthi-run areas. Iran-backed Houthis had created a parallel banking system and barred using the new banknotes printed by CBY in Aden.
Economists say that the stability of the riyal exchange rate in areas controlled by Iranian-backed militias does not reflect the reality of the economic situation.
What Houthis do is impose the exchange rate by force and encourage banking companies to withdraw hard currency from government-controlled areas.
On Monday, Hadi had met with CBY’s board members and emphasized the need to save the national currency and economy, official sources reported.
Hadi ordered preserving CBY’s independence and taking measures to stop the involvement of banks and money exchange businesses in currency speculation.
Chairing a meeting with the prime minister and CBY’s board of directors, Hadi ordered ensuring serious surveillance on banks and money exchange businesses and ensuring the relocation of commercial banks’ headquarters from the Houthi-controlled Sana’a to the country’s temporary capital Aden.
He also ordered boosting the bank’s control over the money supply and ensuring that the monetary policy and market tools are not left in the hands of the money exchangers, speculators, and the Houthi militia.
Hadi also directed the government to ensure that the external audit on the bank’s accounts is carried out without delay.