Central Bank of Yemen

The Yemeni government’s decision in September to relocate the central bank and replace its governor has left the country without an institution capable of providing basic economic stabilization. While all the belligerent parties to Yemen’s armed conflict have sought to leverage economic factors, the incapacitation of the central bank may represent an unprecedented escalation in this regard; the international community…

For the past 18 months, Yemen has been going through one of the most chaotic times of its modern history. Since the Houthi takeover of the capital, Sanaa, on Sept. 21, 2014, the country has been witnessing a gradual collapse of the state, which was accelerated when President Abed Rabbo Mansour Hadi left Sanaa for Aden and then for Riyadh. By March 2015, the Houthi rebel group was the de facto power running the country.

In whatever post-conflict scenario eventually prevails in Yemen, the domestic currency and the institutions of state will be essential to the rebuilding process. To date, both have persevered despite the enormous pressure of a vicious civil war and foreign bombing campaign. The Central Bank of Yemen’s actions have successfully protected the value of the Yemeni riyal against the American dollar – essential in a country that imports 90% of its food requirements – while the central government, which even at…

This policy paper, published by the Sana’a Center for Strategic Studies in partnership with the Friedrich-Ebert Foundation, aims to provide a reading of Yemen’s current economic situation. It offers a contemporary context to the crisis, examines the economic impact of the ongoing civil war and Saudi-led military intervention, then discusses policy recommendations for stakeholders regarding how best to prevent the disintegration of Yemen's economy and the onset of famine