Expectations of a decline in the value of the riyal to levels of 1200 to the dollar
English - Monday 12 July 2021 الساعة 12:11 pm
Aden, NewsYemen, special:
The price of the dollar crossed the threshold of 1000 riyals in Sunday's trading, recording 1007 riyals for purchase, and continued its downward journey that has accelerated since March 2020, with the Saudi deposit depleted, and foreign exchange flows to the country's income decreased.
The sources confirm that the Central Bank of Aden, informed foreign experts by the World Bank, of its complete inability to control the exchange companies that have come to dominate the exchange market, with the bank losing its ability to intervene in stopping the decline of the riyal.
Neither Saudi Arabia nor any other donor has so far indicated their willingness to provide continued financing to Yemen, which deepens the weakening of the economic influence of the Central Bank of Aden.
Economists stress that the decline in the value of the riyal is alarming, and the lack of additional financial support for Yemen increases the risks of continuous price hikes, and the growth of disparity in exchange rates between Sanaa and Aden.
Besides the depletion of the Saudi deposit, and the decrease in the flow of foreign exchange; The faltering of the Riyadh Agreement, the outbreak of battles in Marib and Al-Bayda, the departure of exchange companies from the control of the Central Bank, and the Houthi economic war has accelerated the slide of the riyal to current levels.
Maliones expected the riyal's value to continue declining until it reaches levels of 1200 riyals per dollar, which is equal to the amount of domestic money supply compared to the size of the economy.
The volume of foreign exchange available in the local market is currently limited to three sources: expatriate remittances, humanitarian aid, and limited oil export revenues, which is insufficient to stem the continued depreciation of the riyal.
Saudi financial support to the Yemeni economy, worth more than $2.2 billion since March 2018, has been a crucial factor in helping Yemen escape economic collapse.
Economists confirm that the delay in providing a financial deposit to support the Central Bank and prevent a complete collapse of the Yemeni economy, reduces the effectiveness of the aid, and will cause an immediate and slight recovery of the riyal.
