ADEN (Debriefer)--Economists and bankers on Thursday warned of further depreciation of the Yemeni currency in coming days in regions controlled by the internationally recognized government.
The Yemeni rial has fallen to its lowest level ever against the US dollar in these regions, losing 34% of its value so far this year. One US dollar is buying 802 rials in the south.
Observers expect it would trade 1.000 per US dollar by the end of this month.
The exchange rates are somehow stable in Houthi-region, where one US dollar is buying 600 rials.
Banking expert, Nashwan Salam, said the Aden-based central bank of Yemen is no longer able to control the exchange market and monetary policy after it has lost tax and customs revenues. The southern transitional council captured Aden last year and now is collecting all revenues.
Public funds are stolen in order to drain the bank's budget and weaken its role as it is continuing to lose reserves of foreign currencies, Salam told the New Arab.
Meanwhile, observers argued the chaos in the south is providing profitters with the opportunity to rise and expand the black market.
Reports have recently suggested that the shadow economy accounts for 90% of Yemen's GDP at the moment. Such estimates depended on the way the state revenues are being collected including control of groups parallel to the government of tax and customs revenues and a halt to national exports.
Yemen has lost $15 billion due to halting LNG exports in the past five years, according to official estimates. Saudi Arabia and the United Arab Emirates are controlling the Yemeni ports. The two countries have been fighting in the country since March 2015.
Exchange firms are controlling the exchange rates, said expert in the financial studies and research institute, Fahad Dirhim. The central bank can't do its job, and if it tries to do something, it will collide with these firms, Dirhim added.
