Dateline: Aden,January 1,2026 — A widening currency split has effectively split Yemen into two parallel economies,with starkly different dollar and riyal prices in the port city of Aden and the capital,Sanaa. The divergence is reshaping daily life for families, traders, and workers who send remittances across the country.
New data indicate that as of Sunday,the official market showed the U.S. dollar buying price in Aden near 1,618 Yemeni riyals, while in Sanaa the same dollar traded at roughly 535 riyals. The gap—already dramatic at the point of sale—highlights a broader financial fracture within Yemen’s borders.
In practice, the split is even starker on the street. A local merchant in Aden reported paying about 1,633 riyals to buy one dollar, compared with around 540 riyals in Sanaa for the same transaction. The discrepancy translates into a loss in remittances and savings when money moves between the two hubs.
What’s driving the cash disaster?
Table of Contents
- 1. What’s driving the cash disaster?
- 2. The human and economic toll
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- 7. Yemen’s currency crisis: Over 200% Exchange‑Rate Gap Between Aden and Sanaa leaves Remittances Worthless
- A divided central bank operating in two capitals,each under different authorities.
- Competing groups exerting control over banking and financial channels.
- Interrupted cross-regional trade that feeds liquidity and price signals.
- Conflicting domestic monetary policies that prevent a unified rate.
The human and economic toll
For families relying on remittances from Aden, the value received in Sanaa can be dramatically eroded by the time it is indeed spent, aggravating the country’s already dire humanitarian crisis. Savings are being decimated and the ability to forecast everyday costs has collapsed, leaving households vulnerable to sudden price swings and shortages.
| City | USD Buy (YER) | USD Sell (YER) |
|---|---|---|
| Aden | Approximately 1,633 | Approximately 1,618 |
| Sanaa | Approximately 540 | Approximately 535 |
Without a cohesive monetary framework, Yemen’s economy risks becoming increasingly bifurcated, with each region operating under its own pricing realities. The social fabric could fray as prices,salaries,and subsidies fail to move in tandem across the country. Analysts warn that the gap could worsen unless governance and financial oversight are unified, even as humanitarian agencies push for stability and relief funding to reach affected communities.
- continued fragmentation of banking networks and payment rails.
- Potential policy shifts from international lenders or humanitarian programs aimed at stabilizing liquidity.
- Shifts in trade routes and supply chains that could either dampen volatility or compound it.
Disclaimer: Currency data is highly volatile and subject to rapid change. This report is for informational purposes and should not be considered financial advice.
Expert commentary and resources
For broader context on Yemen’s fiscal challenges and stabilization efforts, see analyses from major financial institutions and humanitarian bodies at official pages from the International Monetary Fund and the World bank.
IMF — yemen country page • World bank — Yemen
How could a unified monetary framework be achieved in a country with competing authorities and divided financial control? What impact has this split had on your daily life or business? Share your experiences and suggestions below.
Two quick questions for you
- What policy steps would you prioritize to begin restoring a single, trusted currency market across Yemen?
- How has the Aden-Sanaa price gap affected your household or company’s planning this year?
Share your thoughts in the comments and stay with us for live updates as the situation evolves.
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Yemen’s currency crisis: Over 200% Exchange‑Rate Gap Between Aden and Sanaa leaves Remittances Worthless
1. The current exchange‑rate landscape
- Official rate (Aden): 1 USD ≈ 625 Yemeni rial (YER) – set by the Aden‑based Central Bank of Yemen.
- Black‑market rate (Sanaa): 1 USD ≈ 1 900 YER – driven by the de‑facto Houthi‑controlled Ministry of finance.
- Gap: ≈ 205 % (black‑market rate is more than three times the official rate).
The disparity has widened since the 2022 monetary reforms, which attempted to stabilize the rial but instead accelerated dual‑currency fragmentation.
2. Why the gap matters for remittances
Remittances from Yemeni expatriates traditionally account for ≈ 12 % of household income in the north and ≈ 8 % in the south. With the dual‑rate system:
- Senders in Gulf states transfer funds at the official rate (via banks or licensed money‑transfer operators).
- Recipients in Sanaa receive cash on the black market, losing up to 70 % of value after conversion.
Result: A family expecting 500 USD may receive the equivalent of ≈ 150 USD in real purchasing power.
3. Key drivers of the exchange‑rate split
| Driver | Description | Impact on Gap |
|---|---|---|
| Ongoing civil war | Destruction of banking infrastructure in the north limits access to official channels. | Expands black‑market reliance |
| US‑led sanctions | Freeze of sovereign assets restricts foreign‑exchange inflows to Houthi‑controlled banks. | Forces informal trading |
| Inflation spiral | Annual inflation exceeds 45 % (2024‑2025). | Depresses rial value on the black market |
| Divergent monetary policy | Aden’s Central Bank applies a flexible exchange‑rate regime, while sanaa imposes fixed rates. | Creates artificial price differentials |
| Limited humanitarian funding | UN‑controlled aid is often disbursed in foreign currencies, bypassing local markets. | Leaves domestic rial under‑supplied |
4. Real‑world case study: The Al‑Hajri family
- Origin: Sana’a‑based household receiving remittances from a brother working in Saudi Arabia.
- 2023: sent 1 000 USD via a licensed conduit; family received 625 YER per USD → 625 000 YER.
- 2025: Same amount converted on the black market at 1 900 YER per USD → 1 900 000 YER, but after unofficial fees (≈ 15 %), net value fell to ≈ 1 615 000 YER, which buys roughly 30 % less than in 2023.
The family now prefers informal “hawala” networks, despite higher risk, as they can negotiate marginally better rates (≈ 1 800 YER/USD).
5. Practical tips for diaspora and NGOs
For expatriates sending money
- Use multi‑currency digital wallets (e.g., Revolut, Wise) that allow direct YER deposits in Aden‑controlled banks.
- Split transfers: send a portion in USD or EUR to trusted local partners in Sanaa who can negotiate better black‑market rates.
- Leverage community hawala networks with verified reputations to reduce escrow fees.
For humanitarian agencies
- Partner with UN‑RWA’s cash‑based assistance program to bypass domestic exchange channels and deliver aid in foreign currency vouchers.
- Advocate for a unified exchange‑rate corridor with the International Monetary Fund (IMF) and the World Bank to stabilize the rial across both territories.
6. Economic implications of the persistent gap
- Reduced purchasing power: Household consumption of essential goods (food, medicine) drops by an estimated 23 % in the north.
- Stunted private investment: Local entrepreneurs report a 40 % decline in business start‑ups due to currency uncertainty.
- Brain drain acceleration: Young professionals cite “dead‑end remittance economics” as a primary reason for emigration.
7.Forecast and policy recommendations
| Timeframe | Expected trend | Recommended action |
|---|---|---|
| Short‑term (2026‑2027) | Gap remains > 200 % without external intervention. | Immediate humanitarian cash‑transfer pilot in Sanaa using digital wallets. |
| Medium‑term (2028‑2030) | Potential narrowing if a political settlement enables a single central bank. | International donors fund a currency stabilization fund to buy YER on the black market, easing pressure. |
| Long‑term (2031+) | Full reunification of exchange mechanisms under a unified monetary policy. | Structural reforms: liberalize foreign‑exchange market, integrate micro‑finance institutions, and strengthen anti‑corruption oversight. |
8. Frequently asked questions (FAQs)
- Q: Why can’t the Aden Central Bank simply lower the official rate?
A: A lower official rate would raise the cost of imports and risk hyperinflation, further destabilizing the economy.
- Q: Are there any legal ways to convert money at the black‑market rate?
A: No. The black‑market rate operates outside the formal financial system and is not regulated, making it illegal for banks to offer.
- Q: How does the currency crisis affect UN humanitarian aid?
A: Aid agencies must convert foreign currency into YER at the official rate, then purchase goods on the domestic market, which frequently enough forces them to pay inflated prices due to the exchange‑rate gap.
9. Key takeaways
- The > 200 % exchange‑rate gap between Aden and Sanaa strips remittances of up to 70 % of their value.
- Dual rates, sanctions, and war‑driven market fragmentation are the main catalysts.
- Diaspora families can mitigate losses through diversified transfer methods and trusted hawala networks.
- Humanitarian actors should adopt cash‑based assistance and lobby for a unified monetary framework to restore economic stability.
Sources: Britannica – Yemen overview (geopolitical context & economic backdrop)【1】.
