Yemeni Rial

Evolution of the YER Exchange Rate

The Yemeni Rial (YER) has experienced a volatile exchange rate throughout its history. From the early 1990s until around 2015, the YER remained relatively stable against major currencies, with a fixed exchange rate set by the Central Bank of Yemen. However, due to political instability, civil war, and economic crisis, the exchange rate of the YER started to devaluate rapidly.

Variations in the YER Exchange Rate

In recent years, the YER has faced significant depreciation against major currencies. For example, in 2015, the exchange rate was around 215 YER per 1 USD, but it has since declined sharply. As of April 2021, the exchange rate stands at approximately 600 YER per 1 USD. These variations in the YER exchange rate are primarily driven by political and economic uncertainties in Yemen.

Significance of YER in the Global Economy

The Yemeni Rial has limited significance in the global economy. Yemen is a low-income country heavily dependent on imports, and the devaluation of the YER has led to soaring inflation and increased the cost of essential commodities for the Yemeni population. However, as Yemen's economy is relatively small and isolated, the YER's fluctuations have minimal impact on the global economy.

Shocks Experienced by YER and Correlation with Other Currencies

The YER has been subjected to various shocks due to internal conflicts, political instability, and economic challenges faced by Yemen. These shocks have resulted in severe depreciation of the currency. As for its correlation with other currencies, the YER has limited correlation with major currencies such as the US dollar or the euro. The primary influence on its exchange rate is the domestic socio-political and economic conditions.