Key Messages

• Conflict has caused elevated levels of population displacement in recent months, particularly in Marib, where over 45,000 peoplewere displaced from September to November, and in Al Hudaydah, where over 25,000 people were displaced in November. In Marib, conflict is close to Marib city. In southern Al Hudaydah, a stretch of the main commercial road used to transport goods north from Aden remains closed due to the shifting front lines, which will likely place upward pressure on food prices through increased transportation costs.

• After losing 50 percent of its value from August to November 2021, the Yemeni Rial (YER) has recovered in areas controlled by the Internationally-Recognized Government (IRG). The recovery began in early December after a change in leadership of the Aden-based Central Bank of Yemen (CBY) and continued later in the month, potentially due to improved supply of foreign currency after two months of the CBY’s new currency auctioning mechanism. As of December 27, 2021, the local currency appreciated to 800 YER/USD, recovering around 53 percent of its value since December 1. In addition, negotiations are ongoing with donors to secure a new, large deposit of foreign currency to support Yemen’s economy.

• Fuel has generally remained available at official stations in areas controlled by the Sana’a-Based Authorities (SBA) during early December. The availability is likely due to slightly increased levels of fuel imports through the Red Sea ports in September and October 2021. However, official stations have reportedly closed at the end of December and, given very low import volumes in November, fuel shortages are periodically expected at official stations during the outlook period, forcing households to pay higher prices at commercial stations instead. Meanwhile, in IRG-controlled areas, official petrol prices fell in December alongside the currency's appreciation and declining global oil prices. Despite this, prices remained 50 percent higher than in January 2021.

• In rural areas, many households are likely experiencing a temporary increase in food availability from their own crop production given the recently concluded or ongoing main harvest of cereals. Meanwhile, market-dependent households in areas under IRG control are likely experiencing some improved food access due to declining prices following the recent currency appreciation. However, prices remain significantly above average and, nationwide, the lack of income-earning opportunities and high food prices will likely continue to drive below-average purchasing power during the projection period. Widespread Crisis (IPC Phase 3)outcomes are likely to continue at the governorate level through May 2022, even in the presence of large-scale food assistance, with worst-affected households likely to face Emergency (IPC Phase 4) or Catastrophe (IPC Phase 5) outcomes.