The Harsh Rial-ity: Yemen Faces Its Worst Financial Crisis Yet
The Yemeni rial has plunged to an unprecedented low—around 2,760 to the US dollar—marking the currency’s steepest collapse since war erupted in 2015. The freefall, which has paralyzed currency exchange in government-held areas, is the latest blow to a country already reeling from economic ruin and what the United Nations calls the world’s worst humanitarian crisis.
The rial’s value has deteriorated by more than 1,200% since the start of the conflict, when it traded at just 215 per dollar. The plunge has obliterated salaries and savings, leaving millions unable to afford even basic food staples. “The rial’s ongoing depreciation reduces real wages, fuels inflation, and causes widespread shortages of essential goods,” said economic expert Ramzi Sultan. He blamed the meltdown on a mix of collapsing revenue, rising government obligations, and a deeply fractured financial system.
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Since late 2022, oil exports—a key revenue stream for Yemen’s internationally recognized government—have been halted following Houthi attacks on pipelines and ports. With both sides deadlocked over revenue-sharing, the government’s ability to pay salaries and deliver services has all but evaporated.
The situation is even more chaotic because Yemen effectively has two central banks: one in Aden, another in Houthi-controlled Sanaa. In the north, older banknotes fetch just 537 rials per dollar, creating a two-tiered economy ripe for exploitation.
Meanwhile, UN agencies warn that nearly 5 million people in southern Yemen face food insecurity, and the number could rise by 420,000 before February 2026 without immediate aid.
Years of civil war, economic collapse, and climate shocks have pushed the country to the brink. With no political solution in sight, Yemenis are once again left to carry the cost.
