ECONOMY

Saudi Arabia deposits $2 bln in Yemen central bank to back currency

A money changer holds bundles of Yemeni currency at an exchange shop in Sanaa on June 8, 2016. (Reuters)

Saudi Arabia’s King Salman ordered a deposit of $2 billion to be paid into Yemen’s central bank on Wednesday to shore up the weak Yemeni currency, the Saudi government said.

The move was made a day after the Yemeni prime minister issued a public plea for funds to prop up the rial and help stave off hunger in the war-torn country.

“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.

Yemen has been divided by nearly three years of civil war between the internationally recognized government, backed by Riyadh, based in the south, and the Iran-aligned Houthi movement which controls the north including the capital Sanaa.

Its currency, the rial, has lost more than half its value against the US dollar and soaring prices have put some basic commodities out of reach for many Yemenis.

Based in the southern port city of Aden, Yemen’s Central Bank has struggled to pay public sector salaries on which many Yemenis depend amid dwindling foreign exchange reserves.

“Saving the rial means saving Yemenis from inevitable hunger,” Prime Minister Ahmed bin Daghr said on Wednesday.
 

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Last Update: Wednesday, 17 January 2018 KSA 17:28 - GMT 14:28
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