Riyadh – Saudi Arabia has given a $200 million cash infusion to Yemen’s Central Bank to shore up its reserves after the war-torn country’s currency went into freefall over the past few weeks.
The Yemeni rial has lost nearly half of its value this year and traded 800 rials to the dollar on Monday, sending food and fuel prices soaring. The state-run Saudi Press Agency says the “donation” will help “achieve stability of the Yemeni economy and boost the local currency.”
A Saudi-led coalition backing Yemen’s internationally recognised government has been at war with the country’s Al Houthi militia, since 2015. The government controls the south, where its Central Bank is located.
UAE Minister of State for Foreign Affairs Dr. Anwar Gargash voiced support for the Saudi move, tweeting: “The collapse of the Yemeni rial is a fundamental challenge for citizens, and is more critical than the availability of food. Saudi Arabia’s initiative to support the rial during these testing circumstances is important. It is vital the international community pressures Al Houthis to hand over part of the $5-$6billion they have looted from the state income [as this will help] to support the rial.”
Many exchange offices shut down in Sana’a and the southern port city of Aden.
Protesters have taken to the streets over the past days in the south, blocking roads and burning tires, demanding President Abd Rabbo Mansour Hadi sack his government over its failure to improve the economy.
Because of the war, Yemen has largely lost its main source of foreign currency from oil and gas exports, which amounted to nearly 70 of the country’s revenue.
The worsening economy comes as the coalition is battling to dislodge Al Houthis from the vital port city of Hodeida, the main entry point for Yemen’s imports and aid.