Saudi Arabia deposited $1 billion in the central bank of Yemen’s internationally recognized government on Tuesday in a bid to shore up the country’s struggling economy, state media said.
In a brief statement, the state-run Saudi News Agency said the $1 billion deposited in the Aden-based central bank will help the Riyadh-backed administration implement economic reforms.
Yemen’s ruinous civil war, now in its ninth year, has destroyed the country’s economy and pushed half the population to the brink of famine. Over 150,000 people have been killed in the conflict.
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The war began in 2014 when Iranian-backed Houthi rebels captured Yemen’s capital Sanaa, along with much of the country’s north, forcing the government into exile. A Saudi coalition, which included the United Arab Emirates, intervened the following year to try to restore the internationally recognized government. The country’s central bank has since been split between the warring parties, with the Houthis running their monetary authority from Sanaa
Rashad al-Alimi, head of the internationally recognized presidential council, thanked the Saudi government for economic aid on Tuesday in a series of Twitter posts. Al-Alimi said the money would go towards financing new projects and stabilizing the currency. No further details were provided.
Saudi Arabia has deposited $1 billion in Yemen’s central bank. (AP Photo)
Yemen has been hit hard by the aftermath of the war in Ukraine, with the country importing 40% of its grain from Ukraine until supply channels were cut following Russia’s invasion. Since then, food prices in Yemen have risen.
In recent years, the Aden branch of the Yemeni central bank has pushed inflation by printing new banknotes to finance debts and cover the cost of public sector salaries. Houthi-controlled areas do not accept banknotes printed by the central bank of Aden.
Two internationally recognized government officials told the Associated Press that the $1 billion aid package would help offset the sharp decline in oil revenues in recent months. Oil exports have slowed dramatically following multiple Houthi drone attacks on tankers and other facilities late last year. Both spoke on condition of anonymity as they were not instructed to speak to the media.
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The Arab Monetary Fund, an Abu Dhabi-based group and a 22-member Arab League sub-organization, will help oversee the use of the $1 billion, the SPA said.
In April 2022, Saudi Arabia and the UAE pledged $3 billion worth of aid to the internationally recognized president. It’s not clear whether Tuesday’s filing is part of that commitment.
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Yemen has seen a lull in frontline fighting in recent months, despite the country’s formal six-month ceasefire deal that expired last October. During this time, Houthi and Saudi officials were engaged in talks to reach a negotiated end to the civil war.
