Saudi Arabia to Deposit $1 Billion in Yemen to Steady Currency

·2 min read

(Bloomberg) --

Most Read from Bloomberg

Saudi Arabia will deposit $1 billion in Yemen’s Aden-based central bank to help stabilize the local currency, a senior official at the bank told Bloomberg.

The official said the payment was part of support, announced by Saudi Arabia last year, to prop up the Yemeni rial and boost the war-ravaged country’s public finances.

The Saudi Finance Ministry declined to comment, while the Ministry of Foreign Affairs didn’t immediately respond to a request. Reuters reported the news earlier Wednesday, citing an unidentified Saudi source.

Houthis Escalate Yemen Tensions With Drone Attack on Port

A separate $1 billion deposit was made in November but authorities in Yemen were worried that a second payment would not be forthcoming after a UN-brokered truce expired in October. Saudi Arabia and the United Arab emirates had pledged $3 billion in aid for Yemen as part of the truce agreed in April.

Saudi Arabia intervened in Yemen’s war to support the country’s internationally-recognized government and to combat Iran’s growing influence in the neighboring state. Based in Aden, the government has been battling Iran-backed Houthi rebels since 2014, after they took control of the capital Sanaa, where a rival central bank operates.

The United Nations has described the effects of the war as one of the world’s worst humanitarian disasters and Saudi Arabia has come under criticism in the West for its involvement in a conflict which has killed nearly 400,000 and destroyed much of he nation’s economy and infrastructure.

The Houthis have blocked oil exports, depriving the government of critical revenues, and have carried out cross-border attacks on Saudi Arabia for its intervention in the war. Nearly three quarters of the population of 33 million is dependent on humanitarian aid, which the Houthis have also restricted.

--With assistance from Sam Dagher.

Most Read from Bloomberg Businessweek

©2023 Bloomberg L.P.