Use of Foreign Currency for Designing of Assistance Packages in Yemen_Fina
The Yemeni Rial (YER) during the course of 2020 has shown high levels of volatility in its value against foreign currencies, in particular, the United States Dollar (USD). As program budgets are calculated in USD or EUROs, but cash transfers are made in YER, the reduction in the value of the YER against USD has led various repercussions, including underspending in the program budget amounts by humanitarian actors which raises questions like whether the transfers have yielded the desired results. As a result of this issue, some Humanitarian actors have raised the question of setting transfer values in USD and/or paying beneficiaries in USD. This issue was previously raised in a meeting of the Yemen Humanitarian Country Team (HCT) in June 2017 in which it was agreed that Humanitarian transfers should be made only in Yemeni Rial and that the CMWG approved SMEB should only be calculated in YER.
The new series of discussions on the same issue indicated a need for the Cash and Markets Working Group to analyze the situation and develop a comprehensive series of documents which can support the Cash actors in the country to plan better for their CVA programmes and design them accordingly to the changing situation of Yemen. Identifying this need, the CMWG established a ‘Currency Exchange Technical Working Group’. The first document produced in the series of guidance notes has been developed on ‘Use of Foreign Currency for Designing of Assistance Packages in Yemen.’ The document was presented in the CMWG meeting on 12th August 2020 and has been endorsed by the members