Yemen Monitor – Newsroom:
Yemeni economic analyst Wahid Al-Fudaei has stated that the recent improvement in the exchange rate of the Yemeni rial against foreign currencies is a natural decline, not an illusory one as some have claimed. He explained that this drop comes after an unjustified surge in the dollar rate.
In a Facebook post, Al-Fudaei argued that describing the decline as “illusory” would only be accurate if the exchange rate fell below its “fair value”—a scenario that would warrant concern at that point.
He noted that the Central Bank should have already determined this fair value, and if it hasn’t, that would constitute a failure in its duties, according to his assessment.
Al-Fudaei predicted that commodity prices would decline gradually based on market forces, pointing out that merchants typically do not lower prices unless competition compels them to.
On Wednesday, the Governor of the Central Bank of Yemen, Ahmed Ghaleb, announced the completion of the transfer of the banking system to the interim capital, Aden. This move is part of a broader effort to enhance monetary stability and regulate the financial market. He confirmed that recent actions taken against currency speculators have led to a notable improvement in the rial’s exchange rate.
By Wednesday evening, the dollar exchange rate had dropped to around 2,400 rials, down from 2,838 rials on Tuesday. The Saudi riyal was recorded at 650 rials.
Earlier in the day, some morning transactions had seen the dollar at 2,625 rials, before continuing its gradual decline throughout the day.
Economic sources attributed this improvement to a series of measures implemented by the Central Bank, including the suspension of non-compliant exchange companies, along with parallel government steps involving budget preparation and revenue enhancement, which helped restore market confidence and halt the depreciation of the local currency.
