Why does yum update command fail with OSError: [Errno 2] No such file or directory: '/var/cache/yum/x86_64/7Server/rhel-7-server-rpms/packages'

Issue

• yum update command is failing with the below error.

  Downloading packages:
  Traceback (most recent call last):
   File "/bin/yum", line 29, in <module>
     yummain.user_main(sys.argv[1:], exit_code=True)
   File "/usr/share/yum-cli/yummain.py", line 375, in user_main
     errcode = main(args)
   File "/usr/share/yum-cli/yummain.py", line 281, in main
     return_code = base.doTransaction()
   File "/usr/share/yum-cli/cli.py", line 683, in doTransaction
     problems = self.downloadPkgs(downloadpkgs, callback_total=self.download_callback_total_cb)
   File "/usr/lib/python2.7/site-packages/yum/__init__.py", line 2492, in downloadPkgs
     presto = DeltaInfo(self, pkgs, adderror)
   File "/usr/lib/python2.7/site-packages/yum/drpm.py", line 146, in __init__
     for rpmfn in os.listdir(po.repo.pkgdir):
  OSError: [Errno 2] No such file or directory: '/var/cache/yum/x86_64/7Server/rhel-7-server-rpms/packages'