The economic war between the internationally recognized Yemeni government and the Houthi group has escalated, in a move that threatens the collapse of the military truce in force and undeclared between the two parties since April 2022, which followed 7 years of intense fighting.
Similar to the political and military division, Yemen is witnessing a monetary division, as there are two central banks, one of which is run by the government in the city of Aden, in the south of the country, and deals in modern securities, the value of the US dollar in which is 1,760 riyals, and the other in the capital, Sanaa, is managed by the Houthis, and deals in older securities, with a value of 1,760 riyals. The US dollar has 531 riyals.
In the latest stage of the conflict, the Central Bank in Aden, last Thursday, stopped dealing with 6 of the largest commercial banks operating in Houthi-controlled areas, after they refused to move their headquarters to Aden. The Central Bank in Sana’a responded by stopping dealing with 12 banks operating in areas controlled by the Houthis. Government influence.
The Houthi reaction was against government banks, namely the National Bank and CAC Bank, and 11 emerging banks.
This decision reveals the extent of the pain of decisions #Central_Bank_of_Yemen In Aden. pic.twitter.com/EtrKop8F1M– zakaria alkamali (@ZakariaAlkamali) May 31, 2024
The Central Bank in Aden is recognized by international financial institutions, which gives it the ability to control access to the global financial network “SWIFT,” and it is also the only body through which local commercial banks can finance import operations from abroad.
On the other hand, the Central Bank in Sanaa derives its strength from the presence of the main bank headquarters in its areas of influence, which gives it the ability to control financial and banking activities inside Yemen. It previously prevented local commercial banks from sharing their data with the Central Bank in Aden.
The Governor of the Central Bank of the Government, Ahmed Al-Maqbi, said in a press conference yesterday, Friday, that “the banks submitted to pressure from a group classified as terrorist and failed to reconcile their situation during the deadline they were given (two months) to move their headquarters to Aden.”
Al-Ma’baqi vowed harsher measures against the Houthis, whom he accuses of destroying and politicizing the banking and financial sector, printing a new coin, and freezing and confiscating citizens’ accounts because of their opposition to their repressive policies.
Briefing by the Governor of the Central Bank of Yemen, Ahmed Ghaleb Al-Maqi, in a press conference held after Friday prayers today, about his recent decisions regarding the violating banks. pic.twitter.com/DAK9VrJMOi
– Abdul Rahman Anis (@abdulrahmananis) May 31, 2024
New troubles
While this conflict may create new living difficulties for the Yemenis, citizen Hussein Al-Osaimi did not pay attention to these decisions, and said, “There is no harm in skinning a sheep after slaughtering it,” in reference to the reality of the Yemenis who have been living without salaries for 7 years, and have become hostage to poverty, hunger, and disease.
He added to Al Jazeera Net that the Yemeni cannot find a living and does not have any financial income, so he is no longer concerned with any economic measures.
But the head of the Association of Banks in Yemen, Mahmoud Naji, told Al Jazeera Net that the burden of this conflict will be borne by the Yemenis, as it will be reflected in a rise in the prices of goods and services after the disruption of the work of commercial banks in transferring money to buy and import goods from abroad to a country that imports about 90% of the needs of its population.
Another video of their deposit claims
He explains that he is in front of the International Bank of Yemen in Sanaa
With the cheers of the bank robber
For your information, the International Bank of Yemen is not alone in the case of the Houthis plundering deposits. It has all the banks under the control of the Houthi terrorist militia, plundering deposits.
The Houthis looted it from the Central Bank of Yemen in Sana’a because all the banks financed it there pic.twitter.com/uh5MeY9GGF– Salah Al-Mashuli (@salah7346) May 14, 2024
According to bankers, the MoneyGram money transfer company, last Thursday, informed Yemeni banks and their banking agents in Yemen of the need to prove no objection by the Central Bank in Aden as a condition for benefiting from its banking operations.
This step, which is expected to be followed by the rest of the international financial networks, will complicate remittances from expatriates, whose money represents a lifeline for millions inside Yemen, at a time when the living crisis is besieging millions of people due to the decline in the volume of international aid.
A state of panic prevailed in the banking and commercial circles in the capital, Sanaa, and recently some banks were unable to return the money of depositors who organized protests demanding that their money be disbursed.
Pour oil on the fire
The Yemeni government justified its decision to ask commercial banks to move the headquarters of their main centers to Aden, as a sovereign Yemeni decision with a monetary and banking nature. The Presidential Leadership Council, which is considered the highest authority, said that the decision is an enhancement of the presence of the state and its legitimate institutions, which express the free national will.
According to a source in the Yemeni government, these decisions were prepared in advance as a response to the Houthis, who started an economic war against the government since 2020, when the group banned the circulation of new banknotes printed by the Central Bank in Aden, and the bombing it launched on oil export ports to deprive the government of millions of dollars. After export operations stopped.
The source, who preferred to remain anonymous, told Al Jazeera Net that the time has come to respond.
But the Houthis accused the United States and those with it of being behind the banking developments, and the group’s leader, Abdul-Malik al-Houthi, described this in a televised interview on Thursday evening as “pouring oil on the fire.”
He added that the pressure on banks in Sanaa is an American effort to support the Israeli enemy, indicating that these decisions are a reaction to his group’s attacks in the Red Sea.
Since late 2023, the Houthis have launched repeated attacks on ships, which they say are linked to Israel, stressing that their operations come in support of the people of Gaza who have been subjected to an Israeli war for about 8 months that has left tens of thousands of martyrs and wounded.
Abdul-Malik Al-Houthi threatened the return of the conflict, and said, “What drives some to recruit themselves and what they have in their hands to serve the Israeli enemy? Will someone come who wants to lose everything: his security and his peace?”
Statement by the Armed Forces regarding the operation to target the American aircraft carrier “Eisenhower” in response to the American-British aggression in support of the Zionist enemy#You_are_not_alone#Battle_of_the_promised_conquest_and_holy_jihad
pic.twitter.com/c51ndhos3U– Al Masirah Channel (@TvAlmasirah) May 31, 2024
Economic crisis
Colonel Rashad Al-Watiri, a moral guidance officer in Sana’a, considered that the bank’s actions in Aden come within the framework of the American-British escalation against the Houthis, to pressure them to stop their naval attacks against Israeli ships, by creating an economic crisis that increases the suffering of the Yemenis.
In an interview with Al Jazeera Net, Colonel Al-Watiri expected that the economic war would ignite the fire of the military war again, and said, “We may witness a military movement in the coming days that will be the strongest to expel the foreign occupier and his local henchmen in the southern and eastern governorates of Yemen.”
He stressed that “the Houthi position will grow stronger and escalate against the United States, Britain, and those within their orbit in Yemen and in the Arab region.”
Despite the current state of conflict and monetary division, the economic file had witnessed understandings led by the UN envoy to Yemen with the aim of unifying monetary policy and obliging the parties to stop employing banks in the ongoing conflict. However, recent developments may return the file to square one.
Mahmoud Naji, head of the Association of Banks in Yemen, says that banks operate in very bad conditions due to this division and have never been a party to this political conflict. Rather, they sought to alleviate the crisis after they were forced to work in bad and unfavorable conditions for banking during the past years.
He adds that banks provide financial services in a professional framework, and their mission is to preserve depositors’ money, and they are supposed to be left to operate impartially and independently for the sake of the Yemeni people, who are experiencing one of the largest humanitarian crises.
