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Currency depreciation drives an increase in fuel prices

  • Key Message Update
  • Yemen
  • May 2016
Currency depreciation drives an increase in fuel prices

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  • Key Messages
  • Key Messages
    • The March 2016 Task Force on Population Movement data indicates that there are approximately 2.7 million IDPs in Yemen. These IDP households are likely facing food security outcomes that are worse than non-displaced households, according to data from WFP’s mVAM surveys.

    • During the past month, fighting has continued along several fronts, including Ta’izz, Sana’a, Ma’rib, Al Jawf, Hajjah, Al Bayda’ and Shabwah, despite peace talks in Kuwait. The ongoing conflict continues to drive below-average incomes for poor households and fluctuating prices for food and fuel on markets. This in turn is limiting household purchasing power and contributing to Emergency (IPC Phase 4) and Crisis (IPC Phase 3 or 3!) food security outcomes across much of the country. 

    • The FAO Desert Locust Situation Update issued on May 18 confirms that hatching and hopper band formation are currently ongoing in the southern coast of Aden, central areas of Wadi Hadramaut and other wadis between Thamud and Minwakh. With limited coverage of monitoring surveys, the actual number of locust could be higher than levels currently being reported. Agricultural production and related labor opportunities may be negatively affected by locust-related crop damages in these areas.

    • The USD Dollar to Yemeni Rial (YER) exchange rate at both official and parallel markets continues to depreciate. During the month of May, the non-official USD/YER exchange rate fluctuated greatly, generally ranging from 275 to 294 but with reports of temporarily higher rates at certain markets. According to key informants, this depreciation led to sharp fuel price increases of approximately 50 percent in some areas in May. If these high fuel prices persist, increased transportation costs could contribute to further food prices increases in the coming months.

    This Key Message Update provides a high-level analysis of current acute food insecurity conditions and any changes to FEWS NET's latest projection of acute food insecurity outcomes in the specified geography. Learn more here.

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