The ongoing deterioration of the Yemeni rial sparked on Sunday popular protests across the country in liberated regions and others under the control of the Iran-backed Houthi militias.
Protests broke out in the liberated cities of Aden, Dhale, Lahj and Shabwa. One person was killed when gunshots were fired during a rally in the city of Qaataba in the Dhale province.
The demonstrators called on the government to intervene and put an end to the deterioration of the economy and prevent the collapse of the rial. The protesters blocked roads, but calm was restored by nightfall.
Houthi-held Sanaa also witnessed protests in the shape of currency exchange shops remaining shut. The Houthis, meanwhile, sought to purchase hard currency and smuggling them abroad to buy weapons. They had also imposed tough restrictions on the transfer of currency from regions under their control to liberated ones.
Observers blamed this tactic for compounding the economic crisis and contributing to the rial’s collapse.
Sanaa wholesale merchants told Asharq Al-Awsat that they have refused to sell their products in the local currency, demanding instead that they be allowed to sell them with any other one, despite Houthi warnings against such a move.
The legitimate government, meanwhile, called for holding an extraordinary meeting to discuss possible solutions, restore stability in the banking market and ensure that prices in the country return to normal.
Prime Minister Ahmed Obeid bin Daghr called on the cabinet to meet in Riyadh to hold the emergency session, government sources told Asharq Al-Awsat.
Bankers told Asharq Al-Awsat that the rial dropped to record lows, reaching 650 to the dollar. With that, the Yemeni currency has now lost nearly two thirds of its value since the Houthi coup in 2014.
The central bank in Aden had previously taken several measures to stop the collapse of the rial, including pumping hard currency in the market and restoring support for the import of vital goods. It also cracked down on unregistered currency exchange shops. None of these measures, however, succeeded in countering the rapid economic collapse.
Economic observers told Asharq Al-Awsat that the government’s efforts to contain the crisis are doomed to fail as long as Yemen is not allowed to restore its oil and gas exports. They also stressed the need to boost liquidity in the hard currency and find a mechanism to import goods.
