The Central Bank of Yemen has decided to float its currency, starting at the price of 250 Yemeni rials to 1 U.S. dollar, down from 215 rials after more than two years of civil war.
In a statement to commercial banks, the Central Bank said as of Tuesday, the currency policy will be based on a floating exchange rate rather than the previous fixed rate.
Yemen's economy received a devastating blow as conflicts between President Abdu-Rabbu Mansour Hadi and the Houthi rebels turned into a civil war in March 2015 when the Saudi-led coalition militarily intervened to support Hadi.
Hadi declared the southern port city of Aden as a temporary capital in the same month after he escaped a house arrest by the Houthi rebels who controlled the capital Sanaa.
The coalition forces imposed a blockade on all Yemeni ports which halted most of exports and restricted imports.
The Central Bank said Sunday that the coalition has blocked the delivery of funds through Aden International Airport 13 times for unknown reasons.
The bank's move to float the currency comes amid a deepening liquidity crisis in the country as government employees, most of whom are in regions controlled by the Houthis, have received no salaries since September 2016. The exchange rate at the black market has decreased to 336 rials to 1 dollar.
Yemen has been receiving cash printed in Russia since the Central Bank was relocated from Sanaa to Aden in late 2016. But officials said the funds were not enough to pay the salaries of all employees.
In a statement to commercial banks, the Central Bank said as of Tuesday, the currency policy will be based on a floating exchange rate rather than the previous fixed rate.
Yemen's economy received a devastating blow as conflicts between President Abdu-Rabbu Mansour Hadi and the Houthi rebels turned into a civil war in March 2015 when the Saudi-led coalition militarily intervened to support Hadi.
Hadi declared the southern port city of Aden as a temporary capital in the same month after he escaped a house arrest by the Houthi rebels who controlled the capital Sanaa.
The coalition forces imposed a blockade on all Yemeni ports which halted most of exports and restricted imports.
The Central Bank said Sunday that the coalition has blocked the delivery of funds through Aden International Airport 13 times for unknown reasons.
The bank's move to float the currency comes amid a deepening liquidity crisis in the country as government employees, most of whom are in regions controlled by the Houthis, have received no salaries since September 2016. The exchange rate at the black market has decreased to 336 rials to 1 dollar.
Yemen has been receiving cash printed in Russia since the Central Bank was relocated from Sanaa to Aden in late 2016. But officials said the funds were not enough to pay the salaries of all employees.
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