Yemeni President Abed Rabbo Mansour Hadi on Monday fired Prime Minister Ahmed bin Dagher and ordered him to be investigated in connection to the country's economic woes, the official Saba news agency reported.
His sacking was brought on because of the government's "inability to take real measures to stop the economic deterioration in the country, especially the collapse of the currency," Hadi said, in a statement published by Saba.
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 Yemen''s Huthi rebels.
The economic downturn, along with a blockade on the rebel-held international airport and ports, has left Yemenis unable to afford food staples and bottled water.
Last month, demonstrations over the high cost of living and the sliding riyal hit several Yemeni cities including Aden, the temporary headquarters of the internationally recognised government.
As Dagher''s replacement, Hadi appointed Moeen Abulmalik Saeed, minister of public works and roads.
Yemeni political sources told AFP that Seed has "excellent" relations with Saudi Arabia and the United Arab Emirates Riyadh's main partner in the military coalition fighting in Yemen.
Hadi said his decision to replace Dagher came "as a result of the negligence that accompanied the government's recent performance in economic and service fields.
The Yemeni president said he was also swayed by "the government's faltering performance in alleviating the suffering of our people, solving its problems and providing for its needs".
In addition to sacking Dagher, Hadi also called him out over his "failure" to take necessary measures to respond to a "catastrophic" tropical storm that slammed into eastern Yemen at the weekend.
Governor of eastern Mahra province Rajeh Bakrit said earlier on Monday said the area had been devastated by the storm.
"The situation is catastrophic in the province and beyond the capabilities of the local authorities," he said, according to Saba.
Nearly 10,000 people have been killed and more than 56,000 injured since 2015, resulting in what the UN has called the worst humanitarian crisis.