A split central bank and two exchange rates

After the Houthis took control of Sana'a in 2014 and the civil war escalated in 2015, Yemen's economy contracted by about half between 2015 and 2018. In September 2016 the internationally recognised government moved the Central Bank of Yemen's operations from Sana'a to Aden, which divided the banking system between two competing authorities. The rial then followed two separate paths: in the Houthi-held north it stayed at around 530 to the dollar because of administrative controls, while in the south it fell to well over 1,000 and, at times, above 1,500 or more per dollar after the government printed new notes to finance its budget. The price of food and fuel rose in the south, and humanitarian needs rose. The division of the central bank explains why Yemen's exchange-rate and price series are hard to interpret as a single national figure.