Houthis dollar import cap could aggravate food crisis in Yemen

The moves could aggravate a food crisis in the Arab country

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The armed Houthi is setting a cap on imports and temporarily banning traders from buying dollars in an attempt to stop the decline of the Yemeni rial currency, according to a document seen by Reuters.

The moves could aggravate a food crisis in the Arab country, already ravaged by war, hunger and disease.

The document was issued after a meeting on Monday in the capital Sanaa between the Houthis’ deputy prime minister for economic affairs, Hussein Maqbooli, and representatives of banks, money changers and importers of wheat, flour, and fuel.

It said the trade ministry had been asked to set a ceiling on imports and to prepare a list of essential goods needed for the whole of 2017, suggesting a move to ration imports to cope with the financial crisis.

The meeting agreed that importers of wheat, flour, fuel products, telecommunications equipment and tobacco will “stop buying dollars for 30 days, and to oblige money changers not to sell or speculate”, according to the document.

The Sanaa meeting came about following a sharp drop in the value of the rial, which was trading at 385 to the dollar in Aden and up to 330 in Sanaa. It had been around 310 for most of the past three months.

Officials from the Houthi group could not immediately be reached for comment.

Money changers in Aden, worried by instability and speculation in the market, also suspended trading in foreign currency on Tuesday over the sharp drop in the value of the rial, which some said had increased since Hadi’s government pumped some 200 billion rials printed in Russia into the market in January.

Last week, the UN Food and Agriculture Organization said Yemen’s estimated supplies of wheat would run out at the end of March.

The financial situation has become more chaotic since Hadi’s government decided to move the central bank from Sanaa to Aden and name a new governor. The Houthis rejected the move, leaving two rival central banks operating in the country.

The confusion has pushed many Yemenis toward destitution after months of unpaid salaries.

Officials said that the central bank under the control of Hadi’s government was due to meet money changers in Aden to discuss ways to stabilize the rial.

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