Following a record collapse of the riyal, the Central Bank announces an auction to sell 50 million dollars, and an emergency meeting headed by “Bin Mubarak” approves urgent treatments

The Central Bank announced today, Tuesday, an auction to sell 50 million US dollars, following a record collapse in the price of the Yemeni riyal against foreign currencies in recent days.

The bank said on its official website that it "opened an auction to sell an amount of fifty million US dollars (50,000,000 USD), on Sunday, October 20, 2024 AD, according to a number of conditions."

“Bids will be submitted using the Refinitiv electronic platform, while banks that do not have access to the Refinitiv platform will be submitted by the Central Bank on their behalf based on an official request submitted via the email designated for this purpose during the auction period,” he said.

The bank explained, “The auction starts at 10:00 a.m. and closes at 12:00 p.m. on the same day,” and stipulated that “the bid amount must be in multiples of a thousand dollars, and the total bids submitted by each participant must not exceed 30% of the total auction value.”

emergency meeting

In a related context, Prime Minister Dr. Ahmed Awad bin Mubarak chaired an emergency meeting of the leadership of the Central Bank of Yemen and the Ministry of Finance, to discuss developments in currency exchange rates in light of recent changes, the procedures followed to deal with them, what was taken, and the results reflected in the exchange rate of the national currency.

According to the Yemeni News Agency "Saba", the meeting, which included the Governor of the Central Bank of Yemen, Ahmed Ghaleb, and the Minister of Finance, Salem bin Braik, discussed the level of coordination between the financial and monetary policy to implement reforms and enhance the principles of transparency and governance in parallel with the aspects of integration to control the exchange rates of the national currency and enhance public revenues, and address and overcome existing shortcomings.

The meeting also addressed economic indicators and new variables in the national currency, in light of developments in local conditions, including the continued suspension of oil exports as a result of Houthi terrorist attacks and their ongoing attacks on commercial ships and international navigation, in addition to regional and international developments related to the dangerous escalation of the Israeli occupation forces and their potential repercussions on various sectors.

The Prime Minister was informed by the Governor of the Central Bank of Yemen about the urgent measures approved by the bank to deal with the current developments in the exchange markets and the work of the banking sector, including the announcement of a public auction to sell 50 million dollars.

The bank governor pointed out the increasing pressures on the exchange rate of the national currency with the cessation of the most important national resources, the decline in aid, and the decline in state revenues, and the measures required at the level of the Presidential Leadership Council and the government to support the Central Bank to carry out its duties in these circumstances.

The Minister of Finance also provided a briefing on the financial situation and the tools available to support monetary policy, including rationalizing expenditures and increasing revenues, which contributes to controlling inflation and its repercussions on the prices of basic goods and services.

He stressed that the Ministry, under the directives of the Prime Minister, is working to enhance coordination and aspects of integration with the Central Bank to implement precautionary financial and monetary policies and rearrange priorities in a way that helps overcome the difficult and exceptional circumstances that the country is going through.

The meeting approved a number of urgent treatments and paths to deal with the existing price speculation in the exchange rate, and the mechanisms for implementing them urgently (the agency did not clarify them).

The Prime Minister stressed in the meeting that the government is well aware of the disastrous consequences of the decline in the exchange rate of the national currency on the daily lives of citizens and that it is working hard to put an end to this, and the importance of integrated work at the level of the state, government and central bank and mobilizing all efforts to achieve economic and living stability.

He also stressed the government's support for the measures taken by the Central Bank and the importance of following up on their implementation in a way that helps restore balance to the exchange rate of the national currency and improve its value against foreign currencies.

Bin Mubarak directed full coordination between fiscal and monetary policy to achieve tangible economic stability that will have a positive impact on the exchange rate of the national currency, maintain stability of the general price level, and improve the standard of living of citizens.

The Yemeni riyal witnessed a new record decline against the dollar, and the dollar price exceeded 2,000 Yemeni riyals, while the Saudi riyal price exceeded 520 riyals.

Banking sources believe that the reason for the collapse is “the great scarcity of foreign currency in Yemen and the high demand for it, in addition to the decline in citizens’ confidence in the value of the local currency over the past years.”