The Mutawakkilite Kingdom began issuing coins around the turn of the 20th century. The rial was divided into 160 zalat, 80 halala or 40 buqsha. During the reign of Imam Yahya, the first rial coins were issued. Denominations were given on coins as a fraction of the rial, with the "honorific" Imadi appearing on the coins of Imam Yahya and Ahmadi on the coins of Imam Ahmad. Consequently, the currency is sometimes referred to as the "Imadi rial" or "Ahmadi rial".

A modern-style coinage was introduced into circulation in 1963, following the establishment of the Yemen Arab Republic. The country was one of the last to adopt a decimal currency system. In 1974 the rial was divided into 100 fils, although inflation caused the fils denominations to disappear from circulation.

After the unification of Yemen, the Yemeni rial replaced the North Yemeni rial at par. Denominations issued by the Yemen Arab Republic ceased to be legal tender afterward.

In the reign of Imam Yahya (1904-1948), bronze coins were issued for the 1 zalat, 1 halala and 1 buqsha denominations, and silver coins for the 1 buqsha, 1⁄20, 1⁄10, 1⁄8, 1⁄4 and 1 rial denominations. During the reign of Imam Yahya's successor, Imam Ahmad (1948-1962), the silver 1 buqsha and 1⁄20 rial were discontinued, and 1⁄16 and 1⁄2 rial coins were introduced. Unusually, the 1⁄16 and 1⁄8 rial coins were pentagonal.

Gold coins denominated in guineas were also minted, primarily for presentation purposes.

In 1962, the Arab Republic first issued bronze 1⁄2 and 1 buqsha, 1⁄20, 1⁄10, 2⁄10 and 1⁄4 rial in a similar style to those of the last king. These were followed in 1963 by a new coinage, consisting of aluminium-bronze 1⁄2, 1, and 2 buqsha and silver 5, 10 and 20 buqsha and 1 rial coins.

In 1974, decimalized coinage was introduced, consisting of aluminium 1 fils, brass 5 and 10 fils coins, and cupro-nickel 25 and 50 fils coins. Cupro-nickel 1 rial coins followed in 1976.

In 1964, the government introduced North Yemen's first paper money, which consisted of 1, 5, and 10 rial notes. These were followed by 10 and 20 buqsha notes in 1966, revised 1, 5, and 10 rial notes in 1969, and 20 and 50 rial notes on 13 May 1971.

The Central Bank of Yemen was established on 27 July 1971, with its headquarters in Sana'a, the capital of the Arab Republic of Yemen. The Central Bank of Yemen absorbed the functions of the Yemen Currency Board. When the Yemen Arab Republic (North Yemen) and the Democratic Republic of Yemen (South Yemen) united on 22 May 1990 to form the Republic of Yemen, the north's Central Bank of Yemen merged with the south's Bank of Yemen, and the joint venture continued to use the name Central Bank of Yemen.^[1]