will deposit $2 billion into Yemen’s central bank in an effort to support the war-torn country’s economic crisis, the kingdom’s state news agency reported Wednesday.
The cash injection — ordered by Saudi Arabia’s King Salman — comes one day after Yemeni Prime Minister Ahmed bin Daghr issued a public plea for international support. He called on allies to help shore up the country’s currency and save Yemenis from “inevitable starvation.”
Yemen has been polarized by almost three years of civil war with Saudi Arabia and Iran backing different sides in what is widely seen as a proxy conflict for regional and religious influence. The internationally-recognized government, backed by Riyadh, is based in the south of Yemen. Meanwhile, the Iran-aligned Houthi movement is situated in the north — which includes the capital Sana’a.
The move is an attempt to set up a “functioning and legitimate” Yemeni government, Marcus Chenevix, Middle East and North Africa (MENA) analyst at TS Lombard, told CNBC in a phone interview Wednesday.
Chevenix added that while he anticipated the deposit to be a one-off in terms of its “very large” size, Yemen could expect “continued support” from Riyadh in the future.
Yemen’s central bank, which is based in the southern port city of Aden, has struggled to pay public sector salaries amid a sharp drop in foreign exchange reserves.
Since the war began in 2015, the Yemeni rial has lost around half its value against the U.S. dollar. Meantime, food and fuel prices have skyrocketed, leaving the same basic commodities out of the reach for many Yemeni civilians.
The ongoing conflict has caused widespread destruction and killed thousands of people, with the United Nations saying the death toll had reached 10,000 by mid-2017.
Read full article by Sam Meredith on CNBC, January 17, 2018