The economic and political crisis and its impact on the deterioration of the exchange rate in Yemen (Effects, repercussions and solutions)

Abstract

Political and economic crises in Yemen always crystallize at various stages and in an economy that depends in part on resources coming from outside the gross domestic product.

     The paper reviewed the impact of the free full float of the exchange rate and the inflationary issuance of the currency to confront the disbursement of salaries of state employees.

     The paper came out with many recommendations and proposals to confront the economic crisis and its various repercussions, emphasizing the importance of continuing to stop the inflationary issuance of the currency, which the Central Bank has followed since January 22, with the necessity of supporting the Central Bank's external reserves that enable it to continue indirect intervention to mitigate the impact of pressures on the demand for the dollar in the foreign exchange market and the gradual withdrawal of excess liquidity through the method of electronic auctions followed.

     Working to resume oil exports that have been suspended since the end of 2021 to secure the state budget's need for hard currency and provide import resources.

     And working to revive the sectors of the real economy by bridging macroeconomic imbalances and strengthening and developing the agriculture and fisheries sector and the manufacturing industries sector by following short- and long-term policies and strategies.