The riyal improved unlike prices

The riyal improved unlike prices

The Yemeni riyal witnessed a noticeable improvement in foreign exchange, months after the major collapse of the local currency, which reached its lowest level in the parallel market (black) at 800 riyals per dollar.

Following the monetary policy of the central bank and the Yemeni government, the exchange rate declined to USD 450 per dollar, creating an outlet for Yemenis who felt confident in their local currency and a breakthrough in the economic situation.

Ahmed a Yemeni citizen hopes for a continuation of improvement of the local currency and return the exchange rate to the pre-war outbreak in the country in early 2015.

"If the exchange rate returns to 215 riyals for the dollar, we will faint of surprise," he tells Al Jazeera.

The young man who works in sewing clothes adds that the real test of the government and the central bank is to keep the exchange rate at reduced levels, to lower the prices of the goods, and "I think that is possible if there are real efforts."

Yemen imports more than 90% of its consumption, according to the latest economic report of the Sana'a Centre for Strategic Studies (non-government), including basic materials (wheat, rice, sugar, edible oil, milk), and fuel.

However, despite the improvement in the riyal, commodity prices are at high levels, with the exception of a slight reduction in the prices of domestically produced goods.

Slight retreat

According to a tour of Al Jazeera net in some stores, many of the items are still at their previous price, including infant formula, cheeses, medicines, and imported canned food, while the flour bag (50 kilograms) fell from 14,000 riyals (18.5 dollars) to 10,000.

Fuel prices fell from SAR 435 per liter ($1), two weeks before it was sold at 575 riyals (0.75 dollars), while the prices of fruits and vegetables remained unchanged.

This caused a state of congestion among Yemenis against merchants, as they saw it as "exploitation", as demonstrations erupted in the town of Radfan in the southern province of Al-Dale, while citizens called for the boycott of merchants.

"When the exchange rate went up, we were surprised by the rise in the prices of goods, and when prices fell steady and did not retreat, we are under a war," said Mustafa al-Nuba, an employee of the tax department.

But Ibrahim Fouad, a food dealer, tells Al-Jazeera that exchange rates have not stabilized so that citizens demand new prices for the goods.

Campaigns against violators

The al-Houthi authorities carried out a large-scale campaign targeting supermarkets and pharmacies and closed more than one shop against prices declared by the group's government Ministry of Industry (not recognized).

According to Abdelghani al-Raimi, an inspector of the Ministry of Industry (the unrecognized Houthi government), the campaign against the violating shops is continuing, and there are strict directives to close them.

"Prices are supposed to drop automatically, so all goods are subject to the dollar price," he told Al Jazeera.

The Ministry of Industry in the Yemeni government, which is based in Aden as an interim capital city, has confirmed that it will form control committees to monitor the prices of the goods, but that has not been done until now.

How did that happen?

Similar to the rapid collapse of the local currency, recovery occurred faster, causing chaos in the Yemeni market.

In less than 36 hours, the exchange rate was 480 riyals for the dollar, fell to 320, and then returned to 520 riyals, going down again to 450.

The governor of the Central Bank made a statement was quoted by the Bank's Media center, increased the market chaos, noting that the fair market price is 450 riyals per dollar.

The head of the Chamber of Commerce and Industry in Aden Abubakar Obeid described what is happening in the exchange market as being outside the context of the economic situation.

"The last improvement was surprising and incomprehensible, and not linked to the logical improvement of the economy," he said.

"The central bank has opened funds for merchants, provided them with foreign currency, which was expected to improve the economy but gradually," he added, "but what happened is difficult to explain."

He noted that the United Nations, the central bank, the government and merchants had reached the price of 450 riyals for the dollar, which was most appropriate and fair, and all parties agreed to intensify efforts to stabilize the local currency exchange rate at that point.

The Source : Aljazeera Arabic website 


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