“To address the deteriorating economic situation faced by the Yemeni people as a result of the actions of the Iranian-backed Houthi militias, King Salman bin Abdulaziz has issued a directive to transfer a $2 billion deposit to the central bank of Yemen,” the Saudi Interior Ministry said.
The bailout is expected to boost Yemen’s financial and economic situation while bolstering the Yemeni riyal. As the value of the riyal goes up, the living conditions of Yemeni citizens will change for the better.
The transfer aims to help the conflict-torn country to “cope with the economic burdens resulting from the crimes and violations committed by Iranian-backed Houthi militias,” the Saudi Press Agency (SPA) reported.
The Houthis have been accused of looting the state, seizing government revenues, including those generated from oil and its derivatives. They acquire this revenue in Yemeni riyal as they manipulate its exchange rate, the statement said.
“They are doing all this to pursue their own destructive objectives at the expense of the Yemeni people,” SPA cited, adding that their actions have resulted in a “steady devaluation of the currency, which has significantly damaged the lives of Yemenis for several years.”
This brings the total that Saudi Arabia has sent to Yemen’s central bank to $3 billion.
Yusuf Al-Othaimeen, secretary-general of the Organization of Islamic Cooperation (OIC), said such a move would alleviate suffering of the Yemeni people.
“It’s not a loan, it’s a deposit and the legitimate Yemeni government will not have to pay it back,” a source close to the Saudi government said, according to Reuters.
Aid workers on the ground told Reuters they expected the riyal to rebound due to the Saudi cash injection.
“Saving the riyal means saving Yemenis from inevitable hunger,” Prime Minister Ahmed bin Daghr said on Wednesday.
The riyal currently trades at 500 to the dollar, down from around 215 before the war, a serious depreciation for a country that relies heavily on imports of basic foodstuffs.
In 2016, the Yemeni government moved the central bank to second city Aden from the capital where the Houthis operate their own rival central bank.
Penny Mordaunt, British secretary of state for international development, stressed London’s support for Saudi efforts to stop illegal arms smuggling into Yemen. Mordaunt strongly condemned continued firing of ballistic missiles by the Houthis toward the Kingdom, the SPA said.