The Yemeni riyal has plummeted to an all-time low of approximately 2,760 per US dollar in recent trading sessions in the internationally recognized government’s controls areas, marking the currency's steepest depreciation since the outbreak of conflict in 2015 and deepening the suffering of millions already grappling with what the UN calls the world's worst humanitarian crisis.
The historic currency collapse has triggered a complete halt in foreign exchange operations at money changers across government-controlled territories during the past weeks, as traders fear further deterioration in the absence of immediate intervention measures, according to local banking sources.
When Yemen's conflict erupted in early 2015, the riyal traded at approximately 215 per dollar. But recently the current exchange rate represents a staggering depreciation of nearly 1,200 percent, eroding the purchasing power of ordinary Yemenis and pushing basic necessities beyond the reach of millions.
The riyal's freefall has sparked public demonstrations, with dozens of residents taking to the streets in the southern port city of Aden earlier this month, demanding immediate government action to halt the currency's decline and implement comprehensive public service reforms.
Experts noticed that the riyal's ongoing depreciation reduces real wages, fuels inflation, and causes widespread shortages of essential goods. this destroys consumer confidence and business activity, accelerates capital flight, and increases poverty and unemployment.
The problem is worsened by the divided banking system, with separate authorities operating in Sana'a and Aden. This institutional division has weakened the Central Bank's control over monetary policy and allowed black market operators to manipulate exchange rates.
A United Nations’ data analysis found that the currency collapse compounds an already dire humanitarian situation, forcing approximately 80 percent of Yemen's population to live below the poverty line, with the economic crisis threatening to push millions deeper into destitution.
Last week, three major UN agencies issued urgent warnings about escalating food insecurity across Yemen's southern provinces. The Food and Agriculture Organization, World Food Programme, and United Nations Children's Fund jointly reported that nearly 5 million people in southern Yemen face food insecurity, with conditions expected to deteriorate further without immediate intervention.
The agencies identified multiple factors driving this crisis, including prolonged economic decline, sharp currency depreciation, continued conflict, and increasingly frequent extreme weather events that disrupt agricultural production and food distribution networks.
Despite numerous international mediation efforts and periodic ceasefire agreements, a comprehensive and lasting peace settlement remains elusive.