Al Jazeera Net - Private

The Yemeni riyal witnessed a marked improvement in foreign exchange, months after the big collapse of the local currency, which reached its lowest level in the parallel market (black) at eight hundred riyals per dollar.

Following the monetary policy of the Central Bank and the Yemeni government, the exchange rate fell to 450 riyals per dollar, which was an outlet for Yemenis who felt confident in their local currency and a breakthrough in the economic situation.

Mounir Ahmed hopes the local currency will continue to improve and the exchange rate will return to pre-war levels in early 2015.

"If the exchange rate returns to 215 riyals to the dollar, it will give us hope of a coma," he told Al Jazeera Net.

"The real test for the government and the central bank is to keep the exchange rate at reduced levels and to reduce commodity prices. I think that is possible if there is real work," said the young man who sews clothes.

Yemen imports more than 90% of its consumption, according to the latest economic report of the Sanaa Center for Strategic Studies (non-governmental), including basic materials (wheat, rice, sugar, edible oil and milk), and fuel.

However, despite the improvement in the riyal, commodity prices are at their highest levels, except for a slight reduction in the prices of locally produced goods.

A slight decline
According to a tour of the island of Net in some shops, many of the materials are still at its previous price, including milk and cheese, medicines and imported cans, while the bag of flour (a package of fifty kilograms) from 14 thousand riyals (18.5 dollars) to ten thousand.

Fuel prices fell from 435 riyals per liter ($ 1), two weeks ago sold at 575 riyals ($ 0.75), while fruit and vegetable prices remained unchanged.

This caused the Yemeni people to be oppressed by the merchants, who saw it as "exploitation". Demonstrations broke out in the city of Radfan in the southern province of Dhala, while citizens called for the merchants to be boycotted.

"When the exchange rate rose, we were surprised by the rise in commodity prices. When prices went down, prices remained firm and did not fall," Mustafa al-Nuba, an IRS employee, told Al-Jazeera Net.

But Ibrahim Fouad, a food trader, told Al-Jazeera Net that exchange rates had not stabilized, so that citizens would demand new prices for commodities.

Prices of fruits and vegetables are still at their highest level despite the improvement of the Yemeni riyal (the island)

Campaigns against violators
The Huthi authorities carried out a large-scale campaign targeting supermarkets and pharmacies and closed more than a shop contrary to the prices announced by the Ministry of Industry in the government (not recognized).

According to Abdul Ghani al-Rimi, an inspector of the Ministry of Industry (the unrecognized Huthi government), the crackdown on shops in violation continues, and there are strict directives to close them.

"Prices are supposed to fall automatically," he told Al Jazeera.net. "All commodities are subject to the price of the dollar."

The ministry of industry in the Yemeni government, which is based in the city of Aden, a temporary capital based, has confirmed that it will form control committees to control prices of goods, but this has not been so far.

how did that happen?
As the local currency collapsed rapidly, the recovery took place more quickly, causing chaos in the Yemeni market.

In less than 36 hours, the exchange rate was 480 riyals to the dollar, down to 320, and then the wheel rose to 520 riyals, dropping again to 450.

The governor of the Central Bank of the statements of the transfer of the media center of the bank increased the chaos of the market, he pointed out that the fair price in the market is 450 riyals to the dollar.

The head of the Chamber of Commerce and Industry in Aden, Abu Bakr Obaid, described what is happening in the exchange market as something outside the context of the economic situation.

He pointed out that "the recent improvement was surprising and incomprehensible, not linked to the logical improvement of the economy."

"The central bank has opened up funds to traders and provided them with foreign currency, which was expected to improve the economy but gradually," he said. "But what happened is difficult to explain."

He pointed out that the United Nations, the central bank, the government and traders have reached the price of 450 riyals to the dollar is the most appropriate and just, and all parties agreed to intensify efforts to settle the local currency exchange rate at this limit.