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Monday, December 11 2023

Yemen receives $665mn from IMF in SDR allocation

Yemenreceives665mnfromIMFinSDRallocation mainj
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Yemenreceives665mnfromIMFinSDRallocation mainjSanaa: The internationally-recognised Yemeni government has announced receiving $665 million as the allocation of Special Drawing Rights (SDR) from the International Monetary Fund (IMF).

In a statement issued on Tuesday, the Central Bank based in the country’s southern port city of Aden officially confirmed the injection of the SDR funds into its account, reports Xinhua news agency.

The SDR allocation “will contribute to strengthening the external reserves of foreign exchange in addition to supporting the national economy and achieving stability in the exchange rates”, the bank said.

The value of Yemen’s local currency riyal has witnessed a sharp decline against other foreign currencies across the country’s provinces controlled by the government.

Banking sources told Xinhua that the exchange rate fell to 1,037 Yemeni riyals against one dollar in the local markets of the country’s southern provinces for the first time, exacerbating the country’s already dire humanitarian situation caused by the years-long military conflict.

The UN World Food Program (WFP) in Yemen warned in December 2020 that the riyal had lost 250 per cent of its value since the start of the civil war in 2015, which has led to a 140 per cent spike in food prices.

In 2017, the Yemeni government floated the national currency, a move that economic observers and analysts said was not well-studied a year after the relocation of the Central Bank to Aden.

The Yemeni economy continues to suffer after all exports were halted following a blockade on the country, which was part of a Saudi Arabia-led military intervention in the conflict in March 2015.

The blockade has also restricted imports largely.

All investments, including oil and gas projects whose revenues used to contribute to more than 70 per cent of the state budget, were shut down.

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