(Image credit: Reuters)
Optimism prevailed in the banking sector in Yemen, with hopes rising that the Yemeni currency would stabilize following the signing of an agreement between Saudi Arabia and the Yemeni government to deposit $1 billion at the Central Bank of Yemen.
Bankers in Aden and Sanaa reported to Asharq Al-Awsat that they expect a gradual progress of the Yemeni currency against foreign currencies in the coming days.
Saudi Arabia and Yemen signed an agreement, on Thursday in Riyadh, to deposit $2 billion in Central Bank of Yemen account, in tandem with directives of Custodian of the Two Holy Mosques King Salman bin Abdulaziz.
The agreement was signed by Saudi Finance Minister Mohammed al-Jadaan and Central Bank of Yemen governor Mohammed Zemam.
The Kingdom has affirmed its continual support for the Yemeni government and determination to assist it to undertake its duties aiming to restore the security and stability of Yemen, emanating from its interest in alleviating the suffering of the Yemeni people and helping them to cope with the economic burdens caused by the crimes and violations of the Iranian-Houthi militias that manage to plunder the Yemen wealth, seize the revenues of government institutions, including selling and manipulating oil derivatives, collect their revenues in Yemeni Riyal, tamper with its exchange rate and exploit this situation to achieve personal interests, leading to the deterioration of the Yemeni Riyal exchange rate and negatively impact the lives of Yemeni citizens.
Prime Minister Ahmed Obeid bin Daghr expressed gratitude to King Salman and Crown Prince Mohammed bin Salman, adding that this generosity is appreciated by Yemenis.
Rashad al-Alimi, head of the internationally recognized presidential council also thanked the Saudi government for Tuesday’s economic aid in a series of posts on Twitter. Al-Alimi said the money would go toward funding new projects and stabilizing the currency. No further details were given.
During three years of the Houthi coup over the legit government in Yemen, the domestic currency lost more than half its value. Yet, for the first time since the coup, the Yemeni government announced a state budget for the current year, worth an approximate of one trillion and a half.
Over past years, the Aden branch of Yemen’s central bank has driven inflation by printing new banknotes to finance debts and cover the cost of public sector salaries. Houthi-controlled areas do not accept notes printed by Aden’s central bank.
Despite transferring the central bank to Aden, the temporary capital of Yemen, Houthi militias refuse to subdue to the decision and they continue to seize the bank in Sanaa.
Yemen has been hit hard by the fallout of the Ukraine war, with the country having imported 40 percent of its grain from Ukraine until supply channels were cut following Russia’s invasion. Food prices in Yemen have since surged.
Yemen’s ruinous civil war, now entering its ninth year, has wrecked the country’s economy and pushed half of the population to the brink of famine. Over 150,000 people have been killed in the conflict.
Source: News agencies
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