Since September 2016, competing branches of the Central Bank of Yemen (CBY) have operated from either side of the frontlines in the country’s ongoing armed conflict, with the resultant fragmentation in monetary policy increasingly undermining domestic currency stability. Recently this has led to an accelerating collapse of the Yemeni rial-based currency system altogether and driven a migration toward the use of hard currencies – primarily Saudi riyals and United States dollars – for financial transactions inside the country.
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