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Khabar Agency
10-05-2025
- Business
- Khabar Agency
Last Chance For Yemen: Experts Warn Only Bold Reforms Can Prevent Total Economic Collapse
The collapse of the Yemeni rial is no longer merely a symptom of prolonged military conflict but a stark indicator of systemic structural failures devastating Yemen's economy. Crippled by the absence of coherent monetary policies, a halt in oil exports, and rampant mismanagement, the country now faces unprecedented economic disintegration. This freefall threatens to trigger a total currency collapse, deepening the humanitarian catastrophe and intensifying the daily suffering of millions of Yemenis. On May 9, the Yemeni rial in government-controlled areas collapsed to unprecedented lows, trading at 2,534 riyals per US dollar (buying) and 2,552 (selling). Meanwhile, the Saudi riyal—a regional benchmark—exchanged at 666/669, starkly contrasting Yemen's economic freefall with its neighbors' stability. The Yemeni rial has plummeted by 72% in value since 2018, hemorrhaging nearly a third of its worth annually despite a $500 million Saudi deposit meant to stabilize it, according to the World Food Programme. This currency implosion has fueled spiraling hyperinflation: fuel prices have surged 33% and food costs 28% compared to 2024, part of a devastating 400% price explosion since 2018. "My salary is now equivalent to just $33, compared to $336 before the war, while the price of a bag of flour has surged from YR3,000 to over YR50,000". Civil servant Nabil Mohammed Saleh said. This has driven university academics in Aden, Lahj, Abyan, and Shabwa to protest on May 5, demanding salaries commensurate with pre-2015 purchasing power. Deeper Causes Than the War Economic experts contend that the crisis extends far beyond the war. According to analyst Khaled Al-Raimi, the halt in oil exports has cost Yemen $2 billion since October 2022, a devastating blow for an economy already crippled by near-total dependence on imports and critically depleted foreign reserves. "Halting exports has severed 70% of state revenue. This hemorrhage is compounded by the Houthi-imposed ban on new currency editions and rampant cross-border currency smuggling, which together have sabotaged monetary stability. Meanwhile, systemic rot within Yemen's banking sector, epitomized by the International Bank of Yemen (IBY), reached a breaking point in April 2023 when money laundering schemes prompted U.S. sanctions". Economic expert Waheed Al-Fouda'ei said. Hajj Expenses and Speculation Dr. Ali Al-Masbahi, a prominent economist, warned that the withdrawal of nearly $300 million in Q1 2025 to cover Hajj and Umrah expenses exacerbated Yemen's economic crisis, driving the exchange rate from 2,070 to 2,500 riyals per dollar. The absence of regulatory oversight by the Aden Central Bank has further enabled speculative practices by certain banks and currency exchanges. Economic sources accused the government of squandering 600 million allocated for electricity and spending180 million on the Aden refinery with no results, questioning the absence of a new refinery project in Hadramawt. Failed Rescue Attempts In late April, the Aden Central Bank, in coordination with the Money Exchangers Association, suspended foreign currency trading for 48 hours, leading to a slight recovery before the daily collapse resumed. However, the "Southern Money Exchangers Syndicate" expressed concern over threats to monetary stability. Al-Fouda'ei considers the decision temporary and insufficient for a fundamental solution. A bank source acknowledged that the halt in oil exports is the primary cause of the foreign currency shortage, though other factors exist. On April 29, the bank announced a 30 million, following previous auctions totaling 340 million, of which only $164 million (48%) was sold, according to Al-Masbahi, who believes the auctions failed to stabilize the exchange rate. In February, Yemen's Central Bank urged the Presidential Council to consolidate state revenues into a single treasury account and align expenditures with national priorities. While the bank confirmed it had proposed concrete measures - including restarting oil exports - these recommendations have yet to receive an official government response. UN Interventions Al-Fouda'ei accused the UN of double standards after pressuring the Aden Central Bank to backtrack on relocating banks from Sanaa, despite Houthi violations, including issuing non-compliant coins. For his part, Abdul Hamid Al-Masajedi, Chairman of the Media and Economic Research Forum, criticized the internationally recognized government for failing to take decisive action following the suspension of oil exports. He noted the administration had actually weakened its position by conceding strategic leverage - notably through permitting fuel shipments into Hodeidah. Al-Fouda'ei warned that maintaining the export suspension would leave Yemen able to cover just 40% of its budget deficit. He called for immediate crisis measures and a swift resumption of oil exports to avert economic collapse. Salaries in Dollars "Al-Masajedi criticized the practice of disbursing dollar-denominated salaries to officials abroad, warning it places undue strain on Yemen's dwindling foreign reserves. He called for stricter oversight of financial transfers between government-held and Houthi-controlled territories. "As a potential solution, he advocated implementing a unified exchange rate to reduce the disparity between the competing currency versions - though he acknowledged this might drive Houthi authorities toward informal financial channels". Experts have outlined a dual-track roadmap to salvage Yemen's economy, prioritizing urgent revenue generation alongside structural overhauls. First, resuming oil and gas exports—the state's fiscal backbone—could stem the bleeding, while creating a sovereign wealth fund would channel resource revenues into long-term stabilization. Concurrently, tightening banking oversight and cracking down on currency smuggling are critical to halting the financial system's disintegration. Reforms must also target systemic rot: imposing strict revenue controls, abolishing dollar-denominated salaries for officials and unifying the fractured currency system to curb hyperinflation. Crucially, none of this can succeed without leveraging international partnerships for technical aid and emergency financing. Yemen's economic survival now depends on two critical imperatives: courageous policy reforms to stabilize the financial sector, and unprecedented cooperation among stakeholders to address the worsening humanitarian emergency. Without immediate, coordinated action to restore monetary credibility and curb hyperinflation, the country risks irreversible economic collapse.
The National
18-04-2025
- Politics
- The National
US strikes destroy Houthi-controlled fuel port as rebels claim dozens killed
Live updates: Follow the latest on Israel-Gaza US air strikes have destroyed Ras Isa fuel port in western Yemen, with the Houthi rebels claiming on Friday that at least 38 people were killed in one of the deadliest American attacks on assets controlled by the Iran-backed group. "Ships have continued to supply fuel via the port of Ras Isa. Profits from these illegal sales are directly funding and sustaining Houthi terrorist efforts," the US Central Command said in a statement titled Destruction of Houthi Controlled Ras Isa Fuel Port. "US forces took action to eliminate this source of fuel for the Iran-backed Houthi terrorists and deprive them of illegal revenue that has funded Houthi efforts to terrorise the entire region for over 10 years." According to Houthi authorities, at least "38 workers and employees were killed and 102 others injured in a preliminary toll of the US aggression" on the oil facility. The rebels claimed the US strikes hit the oil port in two waves, the second of which occurred while rescue and ambulance teams were working to extinguish the fires and retrieve victims, resulting in the death of five paramedics. The destruction of the oil port could have devastating consequences for Yemen, which is already facing severe hunger conditions, because the majority of oil and goods enter the country through the two ports controlled by the rebels on the western coast. Rebel-held areas of Yemen have been hit with near-daily US strikes since President Donald Trump launched an air campaign against the Houthis on March 15 in response to the group's threats on shipping in the Red Sea and Gulf of Aden. Washington has been increasing pressure against Iran and the Houthis in recent weeks while also talking to Tehran about its nuclear programme. Iran and the US are due to hold a second round of indirect talks on Saturday, with discussions expected to hinge on whether the US will allow Iran to continue enriching uranium in any capacity. The Houthis launched an armed rebellion in 2014, seizing control of Yemen's capital Sanaa and several provinces, including in the west where they control the port of Hodeidah and Ras Isa. Since November 2023, the group has attacked shipping lanes with missiles and drones, in what they say is to show solidarity with Palestinians in the Israel-Gaza war. Hours before the US strikes on the fuel port, Houthi leader Abdul-Malik Al Houthi declared that the 'US aggression has failed' and vowed to continue attacks in the Red Sea and against Israel, which on Friday said it had intercepted a ballistic missile launched from Yemen. Earlier on Thursday, the US issued new sanctions against the International Bank of Yemen, referring to its financial support for the Houthis, the Treasury Department said. This designation of the bank complements a government effort 'to stop Iran-backed Houthi attacks against commercial shipping in the Red Sea', the department said.
Yemen Online
17-04-2025
- Business
- Yemen Online
US imposes sanctions on Yemen bank, citing support to Houthis
The United States unveiled sanctions Thursday on a Yemen bank, including its key leaders, citing its support for the Houthis in that country. The designation of the International Bank of Yemen (IBY) complements a government effort 'to stop Iran-backed Houthi attacks against commercial shipping in the Red Sea,' said the US Treasury Department. Since November 2023, Houthi forces have targeted shipping lanes using missiles and drones in what they say is solidarity with Palestinians in Gaza, where a brutal war has raged since October that year. 'Financial institutions like IBY are critical to the Houthis' efforts to access the international financial system and threaten both the region and international commerce,' said Deputy Treasury Secretary Michael Faulkender in a statement. The official said the US government was 'committed to working with the internationally recognized government of Yemen.' Thursday's action follows a designation in January of the Yemen Kuwait Bank for Trade and Investment. In a separate statement, the US State Department added that Washington was 'committed to disrupting Houthi financial networks and banking access.' Besides the IBY, key leaders targeted in Thursday's actions are Kamal Hussain Al Jebry, Ahmed Thabit Noman Al-Absi and Abdulkader Ali Bazara, the Treasury Department said. As a result of sanctions, property and interests in property of designated individuals in the United States are blocked and must be reported.
The National
17-04-2025
- Business
- The National
US imposes new sanctions against International Bank of Yemen
The US on Thursday issued new sanctions targeting the International Bank of Yemen, citing its financial support for the Houthi rebels, the Treasury Department said. This designation of the IBY complements a government effort 'to stop Iran-backed Houthi attacks against commercial shipping in the Red Sea', the department said. State Department spokeswoman Tammy Bruce said Washington is 'committed to supporting the internationally recognised government of Yemen's efforts to ensure the country's banking sector remains insulated from Houthi influence'. Houthi rebel forces launched an armed rebellion in 2014, seizing control of Yemen's capital Sanaa and several provinces. Since November 2023, Houthi forces have targeted shipping lanes using missiles and drones, in what they say is to show solidarity with Palestinians in the Israel-Gaza war. 'Financial institutions like IBY are critical to the Houthis' efforts to access the international financial system and threaten both the region and international commerce,' deputy Treasury Secretary Michael Faulkender said. In addition to the IBY, key leaders targeted in Thursday's actions are Kamal Hussain Al Jebry, Ahmed Thabit Noman Al Absi and Abdulkader Ali Bazara, the Treasury Department said. As a result of sanctions, property and interests in property of designated individuals in the US are blocked and must be reported. The US military has ramped up its military campaign against the Houthis and is conducting near-daily strikes on rebel-held targets.
Asharq Al-Awsat
17-04-2025
- Business
- Asharq Al-Awsat
US Imposes Sanctions on Yemen Bank, Citing Support to Houthis
The United States unveiled sanctions Thursday on a Yemen bank, including its key leaders, citing its support for Houthi militants in that country. The designation of the International Bank of Yemen (IBY) complements a government effort "to stop Iran-backed Houthi attacks against commercial shipping in the Red Sea," said the US Treasury Department. The Houthis launched an armed coup in 2014, seizing control of the capital Sanaa and other several provinces. Since November 2023, the Houthis have targeted shipping lanes using missiles and drones in what they say is solidarity with Palestinians in Gaza, where a brutal war has raged since October that year. "Financial institutions like IBY are critical to the Houthis' efforts to access the international financial system and threaten both the region and international commerce," said Deputy Treasury Secretary Michael Faulkender in a statement. The official said the US government was "committed to working with the internationally recognized government of Yemen." Thursday's action follows a designation in January of the Yemen Kuwait Bank for Trade and Investment. In a separate statement, the US State Department added that Washington was "committed to disrupting Houthi financial networks and banking access." Besides the IBY, key leaders targeted in Thursday's actions are Kamal Hussain Al Jebry, Ahmed Thabit Noman Al-Absi and Abdulkader Ali Bazara, the Treasury Department said. As a result of sanctions, property and interests in property of designated individuals in the United States are blocked and must be reported.
