Yemen Risk Overview: Outlook for December 2020 - May 2021 | Risk Update 11 March 2021 Format Risk 1 Depletion of foreign currency reserves drives inflation up; eroded purchasing power and high food prices result in increased levels of food insecurity the Kingdom of Saudi Arabia (KSA) previously contributed to the stability of the Yemeni riyal, but the KSA has so far not announced any additional injection of foreign currency into Yemen. Humanitarian funding, which is also important for foreign currency reserves, is expected to continue at low levels in the coming months. The current conflict situation in Marib – the main source of oil and liquefied gas in Yemen – could significantly disrupt oil and gas facilities and extraction operations, affecting Government of Yemen (GoY) revenues. In February, the riyal continued to depreciate in GoY-controlled areas, from YER 863 to YER 882 per 1 USD, and from YER 597 to YER 602 per 1 USD in the Ansar Allah-controlled north (YETI Dashboard accessed 09/03/2021). Food prices continue to increase steadily; however, prices can vary within the same district, making it difficult to properly track changes and the reasons for them. Currency fluctuations take time to have an impact on the market. In February, as in the previous month, no fuel was discharged at Al Hodeidah port. A few gas stations were still operating in Sana’a, likely drawing from the 20 million litres of fuel seized by Ansar Allah at the end of January. Fuel prices on the black market decreased at the end of February, apparently because of the increased number of informal vendors, as well as a cheaper quality of fuel being sold. Since 3 March, no official gas station has been operating in Sana’a and it is likely that fuel prices will rise again as sources decrease, which will subsequently escalate the prices of food. Remittances are expected to increase in the coming two months – because of Ramadan (13 April–12 May) – possibly providing some relief to households and increasing their ability to meet basic needs, as well as contributing to currency stability and trade financing.