أثر التضخم وِالعرض النقدي على سعر الصرف في اليمن: (دراسة قياسية للفترة 1990-2025)

Abstract

This study aimed to analyze and measure Effect of inflation and money supply on the exchange rate in Yemen for the period (1990-2025). It employed a descriptive-analytical approach and quantitative measurement using the Autoregressive Distributed Lag (ARDL) model to examine the cointegration relationships between the study variables and to estimate the short-run and long-run effects of inflation and money supply on the exchange rate. The results indicated the existence of a long-run equilibrium relationship between the variables. A positive and statistically significant impact of inflation on the exchange rate was found in both the short and long run, reflecting its direct structural effect on the depreciation of the Yemeni Rial. Conversely, the money supply showed a strong, positive, and statistically significant impact on the exchange rate only in the short run, with no long-run effect, which explains the declining confidence in the Yemeni Rial as a store of value and the shift towards foreign currencies in transactions. Accordingly, the study recommended the necessity of ending the institutional division of the Central Bank of Yemen and restoring its full independence to ensure the formulation and implementation of a unified monetary policy capable of managing the money supply and systematically containing inflationary pressures through indirect instruments to achieve monetary stability. This step is integrated with the need to adopt a comprehensive package of economic and financial reforms, centered on restoring sovereign revenues and revitalizing productive sectors. This coincides with a national strategy to enhance confidence in the Yemeni Rial and halt inflationary financing, ultimately leading to a sustainable stabilization of the exchange rate and driving economic recovery.