YER - Yemeni Rial

Yemeni Rial overview

The Yemeni Rial (YER) is the official currency of Yemen, used as the main medium of exchange in the country. The currency symbol is ﷼, and it is issued by the Central Bank of Yemen. The rial replaced the North Yemeni rial and the South Yemeni dinar, and became the unified currency for the newly formed Republic of Yemen.

Yemen has faced significant economic challenges, especially in recent years, due to political instability, war, and conflict. This has led to a steep devaluation of the rial, hyperinflation, and the loss of confidence in the currency. As a result, many Yemenis resort to using foreign currencies, such as the US dollar or the Saudi riyal, for daily transactions.

Origin and History of the Yemeni Rial

In the 18th and 19th centuries, the Maria Theresa thaler, a currency from Austria, was the most widely used currency in Yemen. The thaler was popular in the region, especially due to the Mocha coffee trade with France. Yemen, known for its famous Mocha coffee, required transactions to be made in thalers as it was a trusted and stable currency.

When Yemen unified in 1990, North Yemen (the Yemen Arab Republic) and South Yemen (the People's Democratic Republic of Yemen) merged, and both the northern rial and the southern dinar were recognized as legal tender during the transitional period.

At that time, the exchange rate was set at 1 dinar for 26 rials. However, in 1996, the South Yemeni dinar was officially removed from circulation, and the Yemeni rial became the sole currency of the unified country. This conversion marked an important milestone in Yemen's monetary system.

Yemeni Rial denominations

The coins and banknotes of the Yemeni rial have undergone significant changes over the years.

Yemeni Rial coins

Before unification, North Yemen issued coins with denominations ranging from 1 fils to 1 rial, while South Yemen issued its own coins.

After unification, the Central Bank of Yemen issued new coins with denominations of 1 and 5 rials in 1993, followed by a 10 rial coin in 1995 and a 20 rial coin in 2004.

Notably, in 2023, the Houthi movement in Northern Yemen issued a new 100 rial coin, which caused controversy with the internationally recognized government based in Aden.

Yemeni Rial banknotes

The Central Bank of Yemen initially issued banknotes with denominations from 1 to 100 rials after unification. In 1993, smaller denominations such as 1 and 5 rials were replaced by coins. Similarly, the 10 and 20 rial denominations were also replaced with coins in 1995 and 2004, respectively. The Central Bank of Yemen continued to issue higher denominations, such as 200, 500, and 1,000 rials, to meet market demand.

In 2017, amid the civil war in Yemen, the Central Bank relocated its headquarters to Aden and reissued the 500 and 1,000 rial notes with new security features and different sizes. In 2018, the bank also issued new 200 and 100 rial banknotes to meet the demand for cash circulation.

Yemeni Rial Exchange Rate

The exchange rate of the Yemeni rial has experienced significant fluctuations in recent years, particularly due to the ongoing civil war and the country's economic challenges. Before the conflict in 2015, the exchange rate of the Yemeni rial was more stable, typically ranging from 215 to 250 YER to 1 USD.

However, the weakening of the economy and the banking system has caused the rial to sharply depreciate against stronger currencies such as the USD and the euro.

Currently, the exchange rate of the Yemeni rial changes drastically in a short period due to factors such as inflation, the ongoing conflict, and restrictions on access to foreign currencies.

At present, 1 USD is usually equivalent to around 250-300 YER, but the exchange rate can sometimes fluctuate, even reaching over 1,000 YER to 1 USD on the black market. This reflects the high inflation and the devaluation of the rial in the context of the political and economic instability.

Given the difficulty in maintaining a stable exchange rate, the Yemeni government and the Central Bank of Yemen have implemented measures to curb inflation and stabilize the rial. However, improving the country's economic situation, increasing foreign reserves, and restoring confidence in the currency will take a significant amount of time.

As a result, people in Yemen and businesses often have to deal with unofficial exchange rate calculations, with significant volatility between the official market and the black market. This exchange rate also directly affects international transactions and increases the cost of importing goods from abroad.

In this context, regularly monitoring and updating the exchange rate of the Yemeni rial is essential for businesses and individuals, especially those planning international transactions or remittances outside of Yemen.