Yemen's internationally recognised president Abdrabbuh Mansur Hadi fired and ordered to investigate prime minister Ahmed Ubaid bin Dagher over his government's negligence and failure to address deepening economic crisis.
Hadi appointed Maeen Abdulmalik Saeed as the new prime minister and Ahmed Salim Al-Khanbashi vice prime minister, government-run news agency Saba reported on Monday.
Saeed, 39, worked as minister of public works and roads in the Bin Dagher's government.
Yemen is facing the world's worst humanitarian crisis as a result of armed conflict which broke out after the Iran-backed Houthis ousted the government in September 2014.
The conflict escalated after a Saudi-led military coalition intervened military against the Houthis in March 2015 to restore Hadi's government.
The government, which has been operating from exile in Riyadh, has failed to address the sharp depreciation of the national currency in recent months.
People have taken to streets in several cities in protest against deteriorating living conditions.
The prices of basic products have increased, some by 300%, due to the rial's fall. Protesters demanded the government to step down.
The rial is trading at 730 to the US dollar, down from 480 in July and 215 before the breakout of the war in late 2014.
Citing President's Hadi decree, Saba reported that bin Dagher had also been fired for his government's negligence to take necessary measures to face tropical cyclone Luban which has slammed eastern and southeastern provinces of Mahrah, Hadramout and Socotra.
The cyclone has displaced hundreds of families and left others stranded on rooftops and on roads after their homes were flooded.
Shelters to where families were evacuated have been flooded as well.
Bin Dagher declared Mahrah province a disaster area on Monday after the local authorities said the cyclone had cut off all services and appealed for helicopters to rescue stranded families.
