Yemen's national currency has recovered significantly against the US dollar in recent months, yet the improvement on paper has done little to ease a grinding cash shortage on the ground. Ordinary citizens across government-controlled cities are struggling to access physical Yemeni riyals, exchange firms are capping conversions, and daily transactions have become an ordeal for workers, traders and families dependent on remittances.
A Currency Rebound That Has Not Reached the Streets
The Yemeni riyal has strengthened from roughly 2,900 to the dollar to around 1,500, a marked nominal recovery. The Al Jazeera English report attributes part of that shift to a series of government interventions: the Central Bank of Yemen, based in the southern city of Aden, shut down unauthorised exchange firms accused of currency speculation, centralised internal remittances under a controlled system, and established a committee to oversee imports and supply hard currency to traders. At a board meeting in March, the central bank approved a set of short- and long-term measures to tackle cash shortages, though the specific details were not disclosed.
Despite those steps, physical Yemeni riyals remain scarce in Aden, Taiz, Mukalla and other cities under government control. In large parts of Yemen, the Saudi riyal functions as the de facto currency, with the official exchange rate set at approximately 410 Yemeni riyals to the Saudi riyal. Converting those Saudi riyals back into local notes has become its own crisis.
Exchange Limits Leave Citizens Stranded
Exchange shops have begun restricting how much currency they will convert per customer — a symptom of the liquidity squeeze. Mohammed Omer, a grocery shop owner in Mukalla, described the personal toll:
"I've gone from one exchange to another, and they refuse to exchange more than 50 riyals. It's a waste of time and effort – I've had to close my shop."
The hardship is felt most acutely by those relying on remittances. Saleh Omer, a resident of the Dawan district in Hadramout, described his experience after receiving a transfer:
"I nearly begged the shopkeeper to exchange 500 riyals. We are suffering greatly just to convert Saudi riyals into Yemeni riyals."
Khaled Omer, a travel agency owner in Mukalla, said businesses have been forced into informal workarounds:
"We work with a money exchange trader when we need riyals to pay salaries or meet basic expenses. Exchange companies say they are facing a liquidity crunch."
Low-Denomination Notes Add to the Burden
Government employees have been receiving salaries predominantly in 100-riyal banknotes — the lowest common denomination — creating friction when trying to spend or save them. Munif Ali, a government employee in Lahj, said merchants are pushing back:
"Merchants are refusing to recognise this. Legal action should be taken against them."
In Taiz, frustration has spilled onto social media. Hesham al-Samaan posted publicly after a hospital refused to accept Saudi riyals and he was unable to convert them for medical treatment:
"Is there any justice for the people, oh government? Will anyone hold accountable those who refuse to exchange currency and exploit people's needs?"
Uneven Burdens — and Some Who Benefit
The shortage has created an asymmetry that favours some business owners. An anonymous clothing trader in Mukalla acknowledged the dynamic plainly:
"As a businessman who sells goods in Yemeni riyals, I benefit from the cash shortage. Exchange companies that need local currency I hold sell me Saudi riyals at lower rates."
Banks and exchange firms have rolled out online transfer services in an attempt to ease congestion, but the reach of those solutions is limited. Exchange shops are scarce in rural areas, and internet access in many parts of the country remains unreliable, leaving residents in remote communities with few options.
The liquidity crisis is unfolding against the backdrop of a war between the Saudi-backed government and the Iran-aligned Houthi movement that has killed thousands and displaced millions. The Central Bank's March commitments are yet to translate into relief that residents can feel in their pockets.
