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Asharq Al-Awsat
Asharq Al-Awsat
Aden - Mohammed Nasser

Houthi-Linked Financial Entities Trigger Cash Crisis

A Yemeni worker counting money in a currency exchange store in Sanaa (EPA)

Mahmoud Naji, a Sanaa-based Yemeni citizen, was told by a currency exchange employee that he had to collect a financial transfer from his brother in Yemeni riyals due to a lack of foreign currency liquidity.

He did not fully comprehend what had happened until he randomly checked four different stores. Naji then realized that there was an unannounced liquidity crisis.

After waiting for a week, Naji told Asharq Al-Awsat that he had to rely on a friend's intervention with a currency exchange company to receive the transfer.

The problem is not restricted to the shortage of liquid hard currency, but it also applies to the local currency, with all denominations missing except for 1,000 Yemeni riyals.

Also, Naji said he has not been given a reason for why currency exchange companies lowered the rate of the US dollar from 600 Yemeni riyals per dollar to around 500 riyals. He noted that exchange stores purchase the dollar at this extremely low rate but refuse to sell at the same price.

Economic sources in Sanaa confirmed to Asharq Al-Awsat that the so-called “economic committee,” which is the parallel entity established by the Houthis for all financial and banking institutions and led by Hassan Al-Saadi, is contributing to the manipulation of the US dollar exchange rate.

According to sources, the real price of one US dollar exceeds 1200 Yemeni riyals, but the Houthi committee, which controls the exchange sector and holds traders’ money at the central bank branch, is imposing a different price.

The war ignited by the Houthis has led to the collapse of Yemen's economy and the shutdown of most companies. As a result, most Yemeni families rely on remittances from Yemeni expats, particularly the three million who work in Saudi Arabia.

Many families have been impacted by the manipulation of exchange companies with the dollar rate, in collusion with the Houthis.

Sources believe the goal is to withdraw as much hard currency as possible from the population ahead of a potential peace stage, where experts expect the dollar price to double in Houthi-run areas, where the current price is believed to be made artificially low.

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