Traders threaten strike in Houthi-controlled Yemen as rebels ban currency

Traders threaten strike in Houthi-controlled Yemen as rebels ban currency
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Traders in Houthi-controlled areas have called for an open strike starting on Wednesday to protest against the rebels’ decision to ban trading with new currency notes. (Supplied: Saaed Al-Batati)
Traders threaten strike in Houthi-controlled Yemen as rebels ban currency
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Workers at local exchange companies told Arab News on Monday that they would shutter businesses until Houthis revoked the decision or provided them with the old notes. (Supplied: Saaed Al-Batati)
Traders threaten strike in Houthi-controlled Yemen as rebels ban currency
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Workers at local exchange companies told Arab News on Monday that they would shutter businesses until Houthis revoked the decision or provided them with the old notes. (Supplied: Saaed Al-Batati)
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Updated 30 December 2019

Traders threaten strike in Houthi-controlled Yemen as rebels ban currency

Traders threaten strike in Houthi-controlled Yemen as rebels ban currency
  • The Houthis recently banned people from using newly printed notes
  • The Yemeni government in Aden has condemned the decision

AL-MUKALLA, Yemen: Traders in Houthi-controlled areas have called for an open strike starting on Wednesday to protest against the rebels’ decision to ban trading with new currency notes issued by the internationally recognized government in Aden.

Workers at local exchange companies told Arab News on Monday that they would shutter businesses until Houthis revoked the decision or provided them with the old notes.

The strike would be the biggest act of civil disobedience against Houthi suppression since the Iran-backed rebels seized power in late 2014. 

The Houthis recently banned people from using the newly printed notes, asking them to replace their notes with a virtual currency called the “electronic riyal.” The move has caused widespread anger, with people leaving Houthi areas with their cash to avoid confiscation.

The Yemeni government in Aden has condemned the decision, calling it a pretext for ripping off people and warned against trading with the Houthi currency or handing over money to the Houthis. Several cabinet ministers did not respond to Arab News requests to comment on the decision.

Speaking to Arab News from inside Houthi-controlled areas, people expressed anger as many have kept their savings in the new notes. If they comply with the Houthis, they will be broke overnight.

“The people in the Houthi-controlled areas are experiencing a complex frustration,” a Yemeni journalist who lives in a Houthi-controlled city told Arab News on condition of anonymity for fear of reprisals.

“People face various security and economical troubles caused by the Houthis. They imposed the decision, indifferent to the already deteriorating humanitarian situation,” he said, adding that a large number of people refused to hand over their new notes to the Houthis, fearing bankruptcy or hunger. 

Residents say that the decision has created a black market where the new notes are changed with old ones at a lower price. Other residents have resorted to buying hard currencies from the black market at inflated rates. Some are smuggling themselves into government-controlled areas with bags of cash that they deposit into bank accounts or replace with old notes.

A trader in Sana’a who had 8,000,000 Yemeni riyals ($32,000) in the new notes traveled to the central province of Marib to replace them with old notes.

In September 2016, Yemeni President Abd Rabbo Mansour Hadi moved the central bank headquarters from Sana’a to the southern city of Aden to stop Houthis plundering its reserves. From its new headquarters, the bank printed new notes when the country was experiencing a severe cash crunch. The Houthis deemed the new notes illegal and accused the government of sinking the market with liquidity.

Experts say that the Houthi decision would have disastrous effects on the country’s troubled economy, stabilization of the currency and people’s lives.

“This decision is disastrous, improvizational and illogical and will have a wider negative impact on the economy,” Mustafa Nasr, director of the Economic Media Center, told Arab News on Sunday, adding that the Houthis would fail to impose their decision due to public mistrust.

“The Houthis cannot cancel a circulating currency or initiate another one in the same country mainly with the scarcity of the old notes,” he said, arguing that the Houthis are using the currency as leverage to pressure the Yemeni government in Aden to deal again with the central bank in Sana’a. 

“The Houthi group would not be able to put into place their electronic riyal. They are using this as a pressure tool on the international community and the internationally recognized government (of Yemen) to restore the central bank in Sana’a.”

Shortly after the Houthis began confiscating the new notes, banks and exchange companies suffered cash problems, triggering them to increase remittance charges five times.

Nasr warned that the larger impact of the Houthi decision would be on the stabilization of the currency, affecting everyone in the country.  

“It puts the country’s economy in the wind by undermining monetary policies that led to the stabilization of the riyal this year. It will stifle the private sector and force it into using under-the-table options,” he said.


UK slams ‘illegal’ Israeli settlement plans 

The UK’s minister for the Middle East and North Africa on Monday slammed the Israeli government’s plans to expand settlements in the West Bank. (Reuters/File Photo)
The UK’s minister for the Middle East and North Africa on Monday slammed the Israeli government’s plans to expand settlements in the West Bank. (Reuters/File Photo)
Updated 10 min 11 sec ago

UK slams ‘illegal’ Israeli settlement plans 

The UK’s minister for the Middle East and North Africa on Monday slammed the Israeli government’s plans to expand settlements in the West Bank. (Reuters/File Photo)
  • Britain ‘seriously concerned’ by decision to approve 780 new units in West Bank

LONDON: The UK’s minister for the Middle East and North Africa on Monday slammed the Israeli government’s plans to expand settlements in the West Bank.

In a statement issued by the Foreign, Commonwealth & Development Office (FCDO), James Cleverly said the UK is “seriously concerned by Israel’s decision to approve 780 new settlement units in the West Bank. We urge Israel not to proceed with their construction.” 

He added: “Settlements are illegal under international law and risk undermining the physical viability of the two state solution.”

The new plans were announced on Monday by Israeli Prime Minister Benjamin Netanyahu. On Sunday, a government committee moved to ratify the construction of some 365 homes while giving preliminary approval for another 415, according to Israeli anti-settlement campaign group Peace Now.

An FCDO spokesman called for the construction of settlements “in East Jerusalem and elsewhere in the West Bank to cease immediately.”

In November, Cleverly criticized Israel’s decision to start proceedings for the construction of 1,257 settlement homes in Givat HaMatos.