Yemen - Money

Since 1996, the government has allowed the value of the Yemeni riyal to float—meaning its value is determined by supply and demand, not by the government. Before 1996, the government officially set the price, which led to it being widely sold on the black market . The riyal was devalued in 1996 from YR12 per US$1 to YR50 per US$1. Since 1996, the value has fluctuated sharply. Between 1996 and 1997, the value of the riyal remained stable, selling for an average of YR125 per US$1 for most of that period. Since 1998, however, the value of the riyal has declined steadily, mainly due to rising fears about Yemen's increasing foreign debt and budget deficit . As a result, the riyal traded at YR170 per US$1 in mid-1999. The Central Bank's efforts to keep the value at a stable rate since then have been largely successful. Since late 1999, it has been trading at an average of YR160 per US$1.