ADEN, YEMEN — On Wednesday, October 30, 2024, the Southern Transitional Council (STC) issued a warning regarding the Central Bank of Yemen's ongoing currency auction practices, claiming that the majority of the funds are benefiting the Houthi-controlled areas rather than local markets in liberated provinces.

This statement came during a meeting of the STC’s leadership, attended by council ministers in the internationally recognized Yemeni government and heads of affiliated bodies, according to the council's official website. The meeting addressed the general economic situation in the country, focusing on the rapid devaluation of the local currency and the factors contributing to its decline.

The STC reported that the Central Bank's auctions, held in Aden—designated as the temporary capital—are primarily benefiting banks and money exchange companies based in Saada and Houthi-controlled regions, leaving local markets in liberated areas at a disadvantage.

The council emphasized the urgent need to halt the current auction practices and suggested abolishing the floating exchange rate policy in favor of a managed exchange rate to stabilize the currency. They urged the Central Bank to ensure adequate foreign currency supply for importing essential goods to prevent further depletion of foreign reserves.

The STC also called for swift action by the government and the Central Bank to regulate the banking sector and combat speculative activities by banks and exchange companies based in Houthi territories, which they claim have exploited the lack of effective oversight to manipulate exchange rates.

As of October 28, 2024, the Central Bank had announced thirteen public currency auctions since the beginning of the year, following a three-month hiatus. In the most recent auction, the bank sold $18.6 million at an exchange rate of 2,007 riyals per dollar, while the market rate was reported at 2,094 riyals for sale and 2,036 riyals for purchase, according to Barran Press's banking sources in Aden.