Yemen's central bank floats riyal currency - circular
15/08/2017 06:41
DUBAI, Aug 15 (Reuters) - Yemen's central bank has floated
the country's currency, instructing banks to use the market rate
for the riyal instead of a fixed rate, according to a circular
issued on Monday.
The circular said that the decision was taken at a meeting
on Saturday, ditching the 250 riyal YER= rate to the U.S.
dollar currently in use.
It told commercial and Islamic banks to "use the exchange
rate prevalent in the market for the U.S. dollar and other
foreign currencies in accordance with the exchange rate lists
issued by the central bank", adding that a floating rate will be
adopted as of Aug. 15.
The currency is changing hands at around 350 riyals to the
dollar in the black market, according to traders.
The central bank in April last year devalued the exchange
rate to 250 riyals to the dollar from 215 riyals.
The currencies of most oil-exporting Arab countries are
pegged or closely tied to the U.S. dollar, but Yemen has been
torn by a two and-a-half year civil war between the
internationally-recognized government of President Abd-Rabbu
Mansour Hadi, backed by Saudi Arabia, and the Iran-aligned
Houthis.
The central bank has kept the country from financial
collapse and the population from running out of food during the
war.
Hadi's government last year moved the central bank from the
capital Sanaa to the southern port city of Aden, where the
government is currently based, in a move that economists feared
could hasten the country's collapse.
Both the central bank in Aden and the one in Sanaa suffer
from depleted reserves but play a key role in mitigating
widespread famine and disease by paying some public sector
salaries.
Last week, the central bank in Aden complained to its allies
in the Saudi-led military coalition about a lack of cash
deliveries needed to pay salaries. urn:newsml:reuters.com:*:nL5N1KZ0DZ
(Writing by Sami Aboudi; Editing by Kim Coghill)
((Sami.Aboudi@thomsonreuters.com; +97143918301;))
Keywords: YEMEN RIYAL/