Saudi Arabia continues to shore up Yemen’s faltering economy, helping it cope with slumping national currency that is being driven even deeper into the ground as Iran-allied Houthi insurgents pursue their war agenda.
The trading rates on the Yemeni rial against the dollar saw significant improvement across the country due to Saudi assistance, Yemeni bankers told Asharq Al-Awsat.
Next to a valuable $2 billion deposit, Saudi Arabia has offered the Central Bank of Yemen (CBY) a $200 million dollar grant. Not only that, but the kingdom has been providing the war-torn country’s power plants with their supply of oil derivatives worth $60 million on a monthly basis.
Part of a series of initiatives undertaken by the Kingdom to aid Yemen through its hardship, each of CBY, the Yemeni Finance Ministry, the Saudi Arabian Monetary Authority, Saudi National Commercial Bank (NCB) and the joint forces commander signed a salary-transfer agreement in Riyadh. The budgetary support provided by Saudi Arabia to Yemen will see funds being transferred to CBY in Aden in Saudi Riyals after which salaries are disbursed in Yemeni currency.
CBY, in an effort to get the national economy back on its feet, has stressed the need for all traders to comply with its measures. Instructions confirm that the credits of traders and banks who fail to refinance within a specified period will be canceled.
It is worth noting that the rial has been recording a gradual recovery ever since CBY Hafez Mead took the helm from Mohammed Zammam, by virtue of a presidential decree.
Under Mead’s leadership, currency prices are improving slowly, despite the Bank's official rate for exchange remaining unchanged at 440 rials for a dollar.
Banks in Sanaa, a Houthi stronghold, have been bearing the brunt of the group’s arbitrary extortion, unwarranted levying and appropriation of cash reserves.
A Houthi-imposed ban against dealing with the government-run CBY in Aden, is held largely accountable for not only sinking the country’s economy, but also destabilizing currency exchange rates.
