Yemen Currency Firms Fail Despite Riyal Rise
Recently, Yemen has experienced the collapse of several currency exchange companies, despite the improvement in the Yemeni rial's value since mid-2025. This situation has revealed the fragility of the banking system. The causes of these collapses include practices by some companies that held large amounts of foreign currencies, taking advantage of the dollar's rise, which led to losses as the rial appreciated. Additionally, unlicensed banking activities, depositors withdrawing their funds out of fear of non-repayment, weak banking oversight, and the excessive expansion of companies without sufficient reserves have contributed to the shock. It is worth noting that some depositor funds remain illiquid. It is proposed to adopt mechanisms for their recovery, to freeze companies' assets to protect depositors' rights, and to implement a bankruptcy law to balance the rights of depositors and creditors.
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