Economic sources in Yemen warned of an expected famine in the country, due to the continued rise in foreign exchange rates against the Yemeni riyal.

The sources explained that the continuation of the Saudi riyal exchange rate at 403 Yemeni riyals, and the US dollar exchange rate at 1,525 Yemeni riyals, will lead to the inability of hundreds of thousands of Yemenis to provide daily meals, as well as any other needs.

The sources called on the Presidential Leadership Council to communicate with the brothers in the Arab coalition, inform them of the seriousness of the economic situation, and demand that they fulfill the support they announced, of which only a little has arrived.

The sources also called on the Presidential Command Council to take urgent measures to break the Houthi siege on the ports of Hodeidah and Al-Dhalea, export crude oil by force, and incite fronts in Hodeidah and Al-Dhalea towards the north.

The sources indicated that the continuation of the current situation, which is preventing Yemen from exporting and preventing military progress, will lead to people dying of hunger.

The economic effects of rising foreign exchange rates

The rise in foreign currency prices against the Yemeni riyal leads to a number of negative economic effects, the most important of which are:

Rising prices of goods and services:

 The rise in foreign currency rates leads to an increase in the prices of imported goods and services, which negatively affects the purchasing power of the Yemeni citizen.

Depreciation of financial assets:

 The rise in foreign currency prices leads to a decrease in the value of financial assets in Yemeni riyals, which negatively affects the wealth of individuals and companies.

Increasing inflation rates:

The rise in foreign currency prices leads to an increase in inflation rates in the Yemeni economy, which leads to a decrease in the purchasing power of the citizen.

Proposed solutions to address the rise in foreign exchange prices

There are a number of proposed solutions to address the rise in foreign currency prices in Yemen, the most important of which are:

Increasing local production:

Domestic production can be increased through reforming economic policies and providing support to the private sector.

Increasing exports:

Exports can be increased by removing restrictions on exports and providing support to exporting companies.

Open ports:

Yemeni ports can be opened to global trade, which will increase the flow of goods and services to Yemen, and thus reduce their prices.

Breaking the Houthi siege:

 The Houthi siege can be broken through military action, or by pressuring the international community to take action against the Houthis.

Conclusion

The Yemeni economy faces great challenges, the most important of which is the rise in foreign currency prices. The continuation of this situation may lead to an expected famine in the country. Therefore, addressing this problem requires urgent action by the Presidential Leadership Council and the Arab Coalition.