Saudi Arabia deposited $1 billion into the central bank of Yemen’s internationally recognized government Tuesday in a bid to bolster the country’s ailing economy, state media said.
In a brief statement, the state-run Saudi Press Agency said the $1 billion deposited into the Aden-based central bank will help the Riyadh-backed administration implement economic reforms.
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.
The war began in 2014 when Iran-backed Houthi rebels seized Yemen’s capital Sanaa, along with much of the north of the country, forcing the government into exile. A Saudi coalition, including the United Arab Emirates, intervened the next year to try to restore the internationally recognized government. The country’s central bank has since been divided between the warring sides, with the Houthis operating its monetary authority from Sanaa.
Yemen has been hit hard by the fallout of the Ukraine war, with the country having imported 40% of its grain from Ukraine until supply channels were cut following Russia’s invasion. Food prices in Yemen have since surged.
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.
Two officials from the internationally recognized government told The Associated Press that the $1 billion aid package will help compensate for the sharp decline in oil revenues in recent months. Oil exports have slowed drastically following several Houthi drone attacks on tankers and other facilities late last year. Both spoke on condition of anonymity as they were not briefed to speak with the media.
The Arab Monetary Fund, an Abu Dhabi-based group and sub-organization of the 22-member Arab League, will help oversee the use of the $1 billion, the SPA said.
