For more than a year, the government has been unable to pay salaries, and the riyal has lost more than two-thirds of its value against the dollar since 2015, when Saudi Arabia and its allies joined the government's fight against the Houthi rebels.
Hundreds of demonstrators protesting against Yemen's deteriorating economic situation and weakening currency blocked major roads and burned tyres in the southern city of Aden on Sunday, with shops and government offices closing.
The Yemeni riyal has lost more than half its value against the US dollar since the start of a civil war in 2015 between the internationally recognised government, based in the south and backed by Saudi Arabia, and the Iran-aligned Houthi movement that controls the north including the capital Sanaa.
Soaring prices have put some basic commodities out of reach for many Yemenis and the central bank has struggled to pay public sector salaries on which many depend as foreign exchange reserves dwindle.
In response, Yemen's government ordered a temporary halt to imports of luxury goods, including automobiles, in a bid to prop up the struggling local currency, according to a statement tweeted by the information minister on Sunday.
The government also ordered a 30 percent increase in public-sector salaries, including for pensioners and contractors.
Yemen is one of the poorest Arab countries and the war, seen as a proxy between regional rivals Saudi Arabia and Iran, has pushed it toward humanitarian collapse as hunger and disease spread.
The United Nations has convened talks in Geneva on Thursday, the first effort to negotiate the conflict in more than two years.
Aden's usually bustling markets were empty on Sunday after the coordinating council of the General Confederation of Southern Workers' Unions called for civil disobedience. Plumes of smoke from burning tyres filled the air, including in the main square where a National Bank of Yemen building is located.
There were reports of smaller protests in nearby municipalities.
"There is no alternative to change the situation except popular revolution against corruption in all its forms," said one of the protesters, Fadl Ali Abdullah.
"The people have lost confidence in everything around them."
One of the organizers said demonstrations and civil disobedience would continue daily from 0600 to 1400 except on Fridays until the current government resigns and prices for consumer goods are reduced.
Authorities have sought to boost liquidity by printing money but the rial plunged from 250 to the dollar to 350 after the first batch of newly printed notes was rolled out last year.
It was trading at 440 to the dollar by the end of last year and crashed to about 500 in January.
Saudi Arabia, which is leading a military coalition against the Houthis, then deposited $2 billion in Yemen's central bank to shore up the rial, but the currency later weakened again.
By Sunday evening, bankers and currency traders in Aden said it had dropped sharply, reaching 610 to the dollar.
President Abd Rabbu Mansour Hadi, who has lived in exile in Riyadh since 2015, directed the government's economic committee to find "effective measures and solutions to overcome the current situation," in comments carried by state news agency SABA but there were few concrete details.
The report said the committee had approved an increase in salaries for public sector workers, including retirees and contractors, without specifying how much.
A government source later told Reuters that preparations are underway for Hadi, who has previously been treated for a heart condition, to travel to the United States on Sunday night for medical care.