Alongside a grinding seven-year military conflict, Yemen’s government and the Houthi rebels are locked in battle on another front – a currency war that has opened up a gulf in riyal values.
Both the government and the Iran-backed Houthis used the same notes until late 2019 when the rebels banned new banknotes printed in government-run Aden over concerns about inflation.
The resulting difference in money supply has since seen the riyal’s value plummet to about 1,000 to the dollar in government areas, while the value in Houthi-controlled zones has held relatively stable at 600.
Citizens and businesses in both government and rebel-controlled zones have been left out of pocket by the divergence, but especially those in the former, given rampant inflation there.
This internal exchange rate has also complicated trade and led to manipulation by profiteers to the detriment of most in a country on the verge of famine.
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