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Yemen central bank expecting $3 billion to prop up stricken economy

December 2, 2018 at 9:43 am

A Yemeni policeman stands in front of the building of the Central Bank of Yemen in the capital Sanaa on August 25, 2016 [MOHAMMED HUWAIS/AFP/Getty Images]

Yemen’s central bank is waiting for deposits worth $3 billion from foreign sources, the state news agency SABA quoted its governor, Mohammed Zammam, as saying on Saturday.

The deposits are expected to further prop up the battered Yemeni economy and its currency, the riyal, whose value has recently improved to 400 against the dollar, from a previous 800.

Yemen has been divided by more than three years of civil war between the internationally recognised government, backed by Saudi Arabia and based in the south, and the Iran-aligned Houthi movement which controls the north, including the capital Sanaa.

Based in the southern port city of Aden, Yemen’s central bank has struggled to pay the public sector salaries on which many Yemenis depend.

The conflict has unleashed a humanitarian and economic crisis in the impoverished country.

An estimated 85,000 children under five may have died from extreme hunger in Yemen since 2015, and the United Nations has said that it could face one of the deadliest famines of modern times, as soaring prices have put some basic commodities out of reach for many Yemenis.

“There is a set of decisions the United Nations or some countries will take regarding the new deposits,” Zammam said, without giving further details.

The Quartet on Yemen – an advisory committee established by the UAE, Saudi Arabia, the US and Britain – said on Saturday it had convened with senior U.N. officials to discuss Yemen’s economic and humanitarian crisis.

It said in a statement that it had “fruitful discussions” but did not provide further details.

Zammam also said that the central bank will take “several decisions” to continue improving the exchange rate of the Yemeni currency, adding they will start paying salaries in Sanaa as of next week.

In October, Saudi Arabia’s King Salman announced a donation of $200 million to Yemen’s central bank, following previous deposits totalling $3 billion.