Money changers fall into the trap of their panic and the dollar continues to decline
English - Tuesday 07 December 2021 الساعة 09:59 am
Aden, NewsYemen, special:
The dollar continues to decline against the national currency, the riyal, despite the hardening of the money changers about selling their foreign currencies, for fear of losses, and the uncertainty of the steps that will follow the formation of the new leadership of the Central Bank of Yemen - Aden.
The price of the dollar began to decline, on Monday afternoon, hours before the decision to restructure the board of directors of the Central Bank of Yemen, and recorded in the night of Monday/Tuesday transactions 1330 riyals, and the Saudis 320 riyals.
The price of the dollar reached 1700 riyals last week, and the Saudi one reached 450 riyals, accompanied by a wave of high prices for goods and services, and the closure of companies, money exchange shops and shops, which disappointed people.
One of the money changers told NewsYemen that all exchange companies and shops changed their financial positions - capital - at the end of last November from the Yemeni riyal to the dollar and the Saudi riyal, which was the reason behind the collapse of the riyal to the levels it had reached.
He added, "The money changers fell into the trap with the decline in the price of the dollar and the Saudi riyal, following the decision to restructure the leadership of the Central Bank and the news about a Saudi deposit."
He expected the exchange companies to suffer great losses, especially those that adhere not to offer their foreign exchange for sale, and every day their loss will increase.
Fuel imports are among the largest foreign exchange depleters. In 2019, Yemen exported nearly $1 billion worth of crude oil and imported $3 billion worth of refined oil products.
With the rise in oil prices in global markets last July to $86 a barrel, it led to a significant increase in the demand for foreign exchange in the local market during a narrow period despite the scarcity of foreign exchange supply, which put severe pressure on the exchange market.
And because of the additional demand for hard currency for the purpose of importing fuel and importers of other goods, all of them are speculating to secure their dollar requirements, albeit at a high price, which sparked the panic of the exchange companies that converted their financial positions into dollars.
The Yemeni banking market has been characterized by the fact that whenever the exchange rate rises, exchange institutions resist its decline in order to avoid any losses that it may incur.
The rise in international fuel prices and speculation in the exchange market under the influence of political and economic variables are among the main factors that blew up the bubble of the recent exchange rate crisis.
International price shocks, exchange rate fluctuations, excessive money supply, increased tax burdens and double customs duties are among the most important factors driving the inflation dynamics in Yemen.
