Al Mukalla: The prime minister of Yemen, Ahmad Bin Daghar, has threatened to take legal action against foreign banks that allow the Al Houthi-controlled Central Bank to access its funds abroad. A government official told Gulf News on Thursday, the government asked the IMF and International Bank(IB) to transfer the Central Bank transactions from its headquarter in Sana’a to Aden, the government’s base. However, the request which was made during peace talks in Kuwait was rejected immediately.

“They told us that the IMF and IB laws do not permit opening a central in a place other than the political capital of the country.” the official, who is also a member of the government team, said on condition of anonymity because he was not authorised to brief reporters.

After failing to convince the two international monetary organisations, the government said it would stop sending oil and taxes revenues that mostly come from the south and Marib to the Central Bank in Sana’a.

Some moneymaking bodies in some provinces like Hadramout, have begun depositing revenues at local branches of government banks.

For fear that the rebels might use Central Bank assets in foreign banks to fund military operations in Yemen, the internationally-recognised government has recently sent a letter to the international Monetary Fund (IMF) asking for a freeze on Yemen Central Bank funds and severing ties with its governor.

In an interview with Abu Dhabi TV broadcast on Wednesday, Bin Daghar said that he was driven into sending the letter to the IMF after receiving confirmed confirmation that the rebels are trying to withdraw the bank’s funds overseas.

“We have asked international banks to freeze the Central Bank assets in foreign currency. We are completely sure that funds inside Yemen and abroad are used for Al Houthis military efforts against the Yemenis and destroying the authority,”

Bin Daghar warned international banks dealing with the central bank that his government would turn to courts if they have to.

“We will resort to the international courts to stop the squandering [of the country’s assets],”

Bin Daghar said the rebel movement and their ally, ousted president Ali Abdullah Saleh, have shifted the country’s assets overseas after spending billions of Yemeni rials on their military activities throughout the country.

“After squandering the central bank’s assets in Yemen, they realised there was still a few hundreds of millions [of dollars] abroad,” he said.

Responding to the government’s accusations, Mohammad Awad Bin Humam, the Central Bank governor, explained that the country’s reseveres dropped due to the halt of oil production and using foreign currency to buy vital commodities like wheat and oil.

Bin Daghar said he officially asked international banks to reject transactions approved by Bin Humam accusing him of taking part in draining central bank funds.

“Bin Humam has allowed the Central Bank to be in the service of Al Houthis and Saleh in the last years. He is no longer neutral. They have used his signature to withdraw billions. He also authorises a monthly withdrawal of YR 25b [$1=YR250] to Al Houthis and Saleh,” Bin Daghar said.

Local government and privates banks have recently suffered from liquidity problems, causing some to default on paying salaries of employees or public servants.

Bin Daghar attributed this problem to Al Houthis’ transfer of billions of Yemeni rials in cash to their heartland, in the Saada province.

“The current unfolding crisis in Yemen is partly due to Al Houthis and Saleh’s seizure of the Central Bank and its reserves in local and hard currencies.”

The row with the rebels over Central Bank assets is the latest of effort by the government to drain the resources of Al Houthis and Saleh supporters.