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Yemen rial falls further despite cenbank support

SANAA, Aug 1 (Reuters) - Yemen’s rial, at a record low, has fallen further against the U.S. dollar despite last week’s $57 million injection into the exchange market by the central bank and threats of fines against currency traders.

The currency fell to 250 rials versus the dollar on Sunday, from 242 on Friday, currency traders in Sanaa said, the worst exchange rate of the rial in history.

On Saturday, central bank governor Mohammed Awad bin Hamam warned that money changers who are found to be hoarding hard currency and refusing to sell to the public may be fined or have their licence revoked, the state news agency Saba reported.

On Thursday, the central bank injected $57 million into the market, the latest of a series of hard cash injections to support the tumbling currency, which hit a record low last week after falling about 16 percent since January.

Yemen is struggling to cement a fragile truce against rebels in the north and curb an increasingly violent separatist movement in the south, while also fighting a resurgent regional al Qaeda wing based in the country.

The central bank has blamed the rial’s recent drop on increased demand for foreign currencies to import goods for the Muslim fasting month of Ramadan which starts in August.

In May, bin Hamam told Reuters that Yemen’s security troubles had been hurting the exchange rate. [ID:nLDE64P0RJ]

Northern Shi’ite rebels said on Sunday they had released about 100 soldiers and pro-government tribesmen they had captured in clashes last month, regional televisions reported.

In continued unrest in the south, suspected separatists shot dead a soldier and injured another, a local official in Dalea province told Reuters on Sunday. (Reporting by Mohammed Ghobari; writing by Firouz Sedarat)

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