Swiss organization: economic war between the legitimate government and the Houthis to control the dollar
English - Sunday 17 November 2019 الساعة 02:10 pm
Aden – NewsYemen.net
The Swiss Capacity Assessment Project attributed the decline in the value of the Yemeni rial to the economic war between the legitimate government and the Houthis, to control the hard currency, the main reason of price fluctuations, expecting future price increases if the economic war between the two parties does not end.
The report said "Access to basic needs in Yemen," that the escalation in the economic war between the conflicting parties, led to the devaluation of the local currency "rial" and increase prices of fuel, water and food, and doubled the cost of living.
The organization pointed to the increasing competition for control of foreign currency, where the Central Bank of Yemen in Aden demands full supervision of banks for exercising control of foreign currency, and the Houthis respond with revenge on banks and traders between the north and south.
If the economic war between the government and the Houthis escalates in controlling hard currency, the Yemeni central bank in Aden could impose sanctions on banks by isolating them from international contact via the SWIFT system.
Since 2015, the legitimate government and the Houthi militia have been engaged in economic competition, especially to control foreign currency, which has entered the country, the Saudi depository, more than US $ 2.2 billion, remittances and humanitarian aid.
The riyal's local currency has fallen by more than half in the past five years, down from 215 rial against the U.S. dollar before the Houthi militia overthrew the state, to around 590-610 as of October 2019, down from a peak of rial 900 in September 2018.
Since 2015, the devaluation of the currency has quadrupled the cost of living in Yemen, rising food prices, and fuel shortages, leading to reduced hours of electricity, making it difficult to operate health and water facilities.
The organization pointed out that Yemen depends heavily on imports, 90% of commodities from abroad, and any devaluation of the Yemeni rial is reflected almost directly on the rise in prices for consumers, and fuel prices directly linked to currency fluctuations, where the market is dominated by a small group of importers .
