Economic Journalist: No Financial Instruments Behind Yemeni Rial’s Recovery

Yemen Monitor / Special Writings:

An economic expert has argued that the recent improvement in the Yemeni rial’s exchange rate against foreign currencies is not the result of traditional financial or monetary tools, but rather the outcome of direct intervention to control the exchange market.

Journalist and economic analyst Wafiq Saleh explained that the relative strengthening of the rial does not stem from sustainable fiscal or monetary policies. Instead, it is due to the Central Bank in Aden tightening its grip on the exchange market after realizing that previous policies—based on unregulated market mechanisms of supply and demand—had allowed speculators and the black market to dominate currency movements.

Saleh noted that current policies are centered on enforcing strict controls over currency exchange operations and tracking the flow of funds. He described this shift as “the right choice for the current phase,” emphasizing that this new approach has weakened speculators and reduced the influence of the parallel market.

According to banking sources, the U.S. dollar exchange rate dropped to around 2,400 rials on Wednesday evening, down from 2,838 rials on Tuesday. The Saudi riyal was reported at 650 rials.

Earlier in the day, the dollar was traded at 2,625 rials before gradually declining throughout the day.

Sources attributed this improvement to measures taken by the Central Bank of Yemen, including the suspension of several non-compliant exchange companies, along with parallel government actions such as budget preparation and revenue enhancement. These steps helped boost confidence in the financial market and contributed to halting the rapid depreciation of the local currency.