RIYADH, Saudi Arabia: Saudi Arabia’s King Salman Bin Abdul Aziz ordered the transfer of $2 billion (Dh7.35 billion) to Yemen on Wednesday, a day after Yemen’s Saudi-backed prime minister made an urgent appeal on the kingdom and its allies to save the local currency from “complete collapse”.
Prime Minister Ahmad Obeid Bin Daghir had called on the kingdom and its allies to act “now, not tomorrow,” and said saving the Yemeni rial means “saving Yemenis from inevitable famine”. In his letter, he said Yemen needed a $1 billion deposit.
For nearly three years, the Saudi-led coalition has been battling the Iran-backed Al Houthi militia to uphold the legitimacy of the internationally recognised government of President Abd Rabbo Mansour Hadi.
Saudi Arabia said in a statement that the funds would be deposited in Yemen’s Central Bank to help address the “deteriorating economic situation faced by the Yemeni people.”
Last year, the Saudi and internationally-backed Yemeni government created an alternative Central Bank from the one in militia-held San’aa, moving it to the southern port city of Aden.
However, the governor of the Sana’a bank, Monasser Al Quaiti, said last year that the Saudi-led coalition had blocked 13 flights bringing cash into the country and was “strangling” its economy. The kingdom accuses Al Houthis of stealing government revenues meant for public services and of manipulating the exchange rate.
The rial, trading at 500 to the dollar, has lost half its value since the war began in March 2015. Food prices have skyrocketed and hundreds of thousands of civil servants have not been paid in more than a year, including doctors and nurses at government-run hospitals.
The economic collapse has contributed to the breakdown of basic services, which in turn has fuelled a cholera outbreak that has killed some 2,000 people and infected about 1 million so far.
