Yemen's Houthis set import cap and suspend dollar buying

The armed Shia Houthi rebels that are in control of much of Yemen’s governmental institutions are setting a cap on imports and temporarily banning traders from buying dollars in an attempt to stop the decline of the Yemeni riyal currency, according to a document seen by Reuters.

The moves could aggravate a food crisis in the Arab country, already ravaged by war, hunger and disease.

The document was issued after a meeting on Monday in the capital Sana’a between the Houthis’ deputy prime minister for economic affairs, Hussein Maqbooli, and representatives of banks, money changers and importers of wheat, flour, and fuel.

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It said the trade ministry had been asked to set a ceiling on imports and to prepare a list of essential goods needed for the whole of 2017, suggesting a move to ration imports to cope with the financial crisis.

The meeting agreed that importers of wheat, flour, fuel products, telecommunications equipment and tobacco will “stop buying dollars for 30 days, and to oblige money changers not to sell or speculate”, according to the document.

Nearly two years of war between a Saudi-led coalition and the Houthi movement, which is aligned to Riyadh’s arch-rival and regional Shia power Iran, has left 80 per cent of the population in need of aid.

The war has split the country between two power centres: the southern city of Aden, controlled by the internationally recognised government of President Abd Rabbuh Mansour Hadi, and the Houthi-run capital Sana’a. Both have suffered from the unstable currency.

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The Sana’a meeting came about following a sharp drop in the value of the Yemeni riyal, which was trading at 385 to the dollar in Aden and up to 330 in Sana’a. It had been around 310 for most of the past three months.

Officials from the Houthi group could not immediately be reached for comment.

Money changers in Aden, worried by instability and speculation in the market, also suspended trading in foreign currency yesterday over the sharp drop in the value of the riyal, which some said had increased since Hadi’s government pumped some 200 billion riyals printed in Russia into the market in January.

Last week, the UN Food and Agriculture Organisation said Yemen’s estimated supplies of wheat would run out at the end of March.