A second installment of $250 million from a $1 billion grant by Saudi Arabia will soon appear in Yemen’s budget to aid salary payments, stated the country’s central bank governor, Ahmed bin Ahmed Ghaleb Al-Maabqi. The remaining $500 million is yet to be transferred, with the first $250 million received last August.
The grant supports Yemen’s struggling economy amidst currency devaluation and soaring prices.
Yemen’s central bank, located in Aden, is vital for the Saudi-backed government, grappling with economic challenges exacerbated by the ongoing conflict with Houthi rebels since 2015. Houthis, aligned with Iran, seized the capital Sanaa, prompting the government’s relocation to Aden.
The Saudi grant aims to alleviate financial strains, particularly for salary disbursements and essential purchases.
However, Houthi attacks on commercial vessels in the Red Sea since November have intensified Yemen’s economic woes.
These assaults, alongside the prolonged war, have compounded the country’s hardships. Al-Maabqi noted the grim situation at the 2024 World Governments Summit in Dubai, emphasizing the worsening crisis due to the Red Sea disruptions.
The Houthis justify their attacks as solidarity with Palestinians against Israel, triggering retaliatory strikes by the US and UK. They demand a Gaza-Israel ceasefire and unrestricted aid access to alleviate Gaza’s humanitarian crisis.
Amidst escalating tensions, Yemen’s economic prospects remain precarious. The Saudi grant offers temporary relief, but long-term stability hinges on resolving the conflict and addressing Yemen’s deep-rooted economic challenges.
