Yemen central banks ready to supply foreign currencies

currency

Yemen’s central bank stated, ” we are willing to supply commercial and Islamic banks with foreign currency to finance imports of goods into the country” which has been pushed to the brink of famine by a four-year war, a Yemeni news agency reported.

Reflecting the war between the Saudi-backed government and the Iran aligned Houthi movement, the central bank has split into two rival head offices for developing hold-ups and settlement problems which have exacerbated an urgent humanitarian crisis.

It was willing to sell banks foreign currency at a rate of 506 rials to the U.S. dollar or at market rates, granted a circular saying by the branch of the southern port of Aden, the seat of the internationally well-known government, “whichever is lower”, state news agency Saba reported late on Monday.

It mentioned the statement since saying this would cover letters of credit and also financing guarantees for imports of products not covered by a $2 billion grant from Saudi Arabia to help finance imports of simple goods and petroleum products.

The United Nations states about 80 % of the 30 million population require some kind of humanitarian help and two-thirds of most districts in Yemen are in a “pre-famine” condition.

The competitor central bank headquartered in Sanaa, the capital now held by the Houthis who control most urban center in Yemen, did not receive any funds from the Saudi loan. A sanctioned in the Sanaa branch informed Reuters last year that dealers must get letters of credit in Aden.

The war pits the Houthi group against a Saudi-led coalition attempting to restore the government of Abd-Rabbu Mansour Hadi that was ousted from power in Sanaa in late 2014. The Houthis say their revolution is against corruption.

The difficulty has devastated the economy of the poorest Arabian Peninsula nation. It has cut supply routes, decreased imports and caused severe inflation. The central bank practically doubled the interest rate late last year to stabilize the currency.