Yemen's financial system is underdeveloped and its economy is largely cash-based. This means that the direct impact of the global financial crisis on the country was limited. It does, however, also reduce the efficacy of interest-rate adjustments, depriving the Central Bank of Yemen (CBY) of an important monetary policy tool. As a result, the CBY's efforts to manage liquidity will remain primarily focused on the issuance of Treasury bills. Although the CBY has a stated goal of liberalising interest-rate policy, it will be hindered in this by the vulnerability of the Yemeni riyal. It raised interest rates sharply in the first half of 2010, and they are expected to remain elevated over the forecast period, given high inflation and domestic political instability.