Saudi Arabia to deposit $200m in Yemen to boost riyal

Saudi Arabia to deposit $200m in Yemen to boost riyal
King Salman of Saudi Arabia had "approved a request" from Yemeni President Abedrabbo Mansour Hadi to provide the funds, the official Saudi Press Agency reported.
4 min read
02 October, 2018
More than 10,000 people have been killed since the Saudi-led coalition intervened in 2015 [Getty]

Saudi Arabia said it will deposit $200 million in Yemen's central bank to help stem a slide in the riyal that has sent food prices soaring in the famine-threatened country.

The emergency aid injection was aimed at "stabilising the economy and increasing the value" of the Yemeni currency, the Saudi information ministry said in a statement.

King Salman of Saudi Arabia had "approved a request" from Yemeni President Abedrabbo Mansour Hadi to provide the funds, the official Saudi Press Agency reported.

The oil-rich kingdom, which leads a coalition supporting Hadi's beleaguered government in its fight against Houthi rebels, already deposited $2 billion in the central bank in January to support the currency, which has lost more than two thirds of its value since the coalition intervened in March 2015.

The new deposit comes less than two weeks after the central bank in the government's de facto capital of Aden raised interest rates on deposits to an all-time high of 27 percent after the riyal slid more than 36 percent since January.

The slide has seen a sharp rise in food and fuel prices that triggered protests across the government-held south in early September and prompted the government to raise public sector salaries by 30 percent.

The riyal rose on news of the latest Saudi deposit, trading at just under 700 to the dollar on Tuesday against 820 the previous day, according to money-changers in the rebel-held capital Sanaa.

But protestors demonstrated against the high cost of living for the second day running in the southwestern city of Taiz, where shops were shuttered and tyres set alight, AFP correspondents reported.

In a statement carried by the government news agency Saba, central bank governor Mohammed Zamam accused commercial banks and money-changers of speculating on the riyal, causing its downfall.

He threatened to impose sanctions on such banks and to seek legal action against speculators for economic crimes.

The UN's humanitarian coordination office warned last month that the currency depreciation was likely to make another 3.5 million Yemenis food insecure, in addition to 8.4 million people who already need emergency food assistance.

The charity Save the Children has warned that more than five million children in Yemen are at risk of famine.

Saudi Arabia is currently leading a military coalition to drive out Houthi rebels from neighbouring Yemen, in a conflict that has killed more than 10,000 people and driven the impoverished state to near-famine.

Yemen has since descended into what the UN calls the world's worst humanitarian crisis, with thousands of people killed and millions at risk of starvation. 

The coalition has been accused of bombing multiple civilian targets, including buses and hospitals. 

The United Nations Human Rights Council voted to extend an international probe of alleged war crimes committed in Yemen despite strong opposition from Saudi Arabia and several of its allies. 

Nations voted 21 to 8, with 18 abstentions, in favour of a resolution that renewed the UN-backed investigation for a year. 

Last month, investigators detailed evidence of possible war crimes committed in Yemen by both the Saudi-led coalition and the Houthi rebels supported by Iran. 

The coalition and the Yemeni government, which together are battling the Houthis, strongly criticised the probe's initial report, arguing that it underplayed rebel violations and Iran's role. 

Human Rights Watch (HRW) said the vote "sent a clear message that it stands with Yemeni civilians".

"States at the UN Human Rights Council stood firm today, in the face of shameful efforts by the Saudi-led coalition to quash a UN expert inquiry," HRW's Geneva director, John Fisher, said in a statement. 

The vote came hours after the Saudi-led coalition strongly launched fresh criticism of the UN human rights mission.

Observers say Saudi Arabia, which leads the coalition that intervened in the conflict in March 2015 on behalf of President Abed Rabbo Mansour Hadi's government, is actively working to quash the international probe.

Agencies contributed to this report.

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