Attachments
KEY HIGHLIGHTS
In May, the exchange rate in the GoY areas continued to weaken, reaching a record low of 1,701 Yemeni Rial (YER) against the US Dollar: In GoY areas, the YER exhibited a significant 25 percent and 38 percent depreciation and against the US Dollar year-on-year (y-o-y) and in comparison, to the 3-year average (3-YA), respectively. Conversely, there was a minor strengthening of 2 and 7 percent against the US Dollar in SBA areas, (Table 1 & Figure 1).
Recent disruptions in the banking sector following escalation in the financial regulations by CBY-Aden and CBY-Sana’a have heightened risk of collapse of the YER in GoY areas. Depleted reserves and limited foreign exchange earnings triggered by the cessation of crude oil and gas exports since 2022 further exacerbate the risk. In contrast, the YER in SBA areas remained stable due to stringent exchange rate regulations, despite acute shortage of US dollars, which continues to disrupt import, trade, and humanitarian operations.
Food imports remained high with a slight decrease in May: there was a decline in food imports during the reporting month, with wheat import volumes through the major seaports of Al Saleef, Al Hodeidah, and Aden dropped by 8 percent compared to the significant levels seen in April 2024. However, these imports were significantly higher (77%) than the same month last year (Refer to Figure 2). On the other hand, diesel and petrol imports through Al Hodeidah Port nearly doubled, while there was a modest 9 percent increase via Aden Port in comparison to April 2024 (Figure 2). Despite these changes, essential food commodities and fuel (petrol and diesel) remained adequately available in markets country-wide in June 2024.
Fuel prices stayed elevated, showing minimal change in May in most markets: During May 2024, diesel and petrol prices in both SBA and GoY controlled areas remained relatively stable compared to the previous month (Refer to Figure 3 & Table 1), due to sufficient tradable stocks. However, there was a 23 percent increase in diesel prices and a 36 – 39 percent increase in GoY areas compared to the same period in 2023 and the 3-YA. In contrast, prices in SBA areas dropped by 11- 19 percent over the same periods. The increase in fuel prices in GoY areas is largely attributed to the weakened value of the YER against the US Dollar and reduced import volumes through Aden Port.
The Minimum Food Basket (MFB) stayed higher than last year but stable: The prices of key staple basic food items (such as Basmati rice, kidney beans, cooking oil, and wheat flour) either remained unchanged or slightly reduced (1-6 percent) in most SBA markets. However, in GoY areas, prices saw a marginal increase