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ALEXANDRIA: Yemen’s currency hit a new low on Thursday after the Iran-backed Houthi militia renewed its ban on banknotes printed by the Yemeni government and banned people from bringing cash into theirs from government-controlled areas Transporting territories, Yemeni officials and economists said.
Local currency traders said the Yemeni riyal was trading at $ 940 on the black market on Thursday, compared to 930 last week shortly after the Houthi-controlled central bank in Sanaa circulated an order warning people of the new Use money like the old banknotes that are available in their territory.
To circumvent the Houthi ban and address the cash shortage in the market, the Aden-based Central Bank of Yemen recently pumped billions of large 1,000 rials into the market, similar to the banknotes used by the Houthis.
Local media reported that the Houthis had stepped up security at their checkpoints to search for the new banknotes.
On Thursday, Hamed Rezq, a journalist loyal to the Houthis, accused the US of starting an economic war on the Yemeni economy by allowing the printing and distribution of new banknotes.
“This is part of the US economic war against Yemen after Washington ran out of military options and failed (its) deception and political pressure,” he tweeted.
In December 2019, the Houthis banned the use of banknotes printed by the legitimate and internationally recognized government and gave residents a month to hand in their cash or face a fine.
The Houthi decision sparked outrage across Yemen, driving up fees for remittances from state-controlled areas to Houthi-ruled areas, and cutting salaries for thousands of officials.
Travelers from government-controlled areas to Sanaa told Arab News that they were being forced to buy Saudi rials or exchange the new banknotes for old ones at inflated prices.
Economists are now warning that the Houthis will use the latest measures to sniff wallets and people’s lives.
“This move will allow the Houthi Group to become more involved in the work of banks, exchange offices and even citizens. With their security grip, the group will find a justification for seizing money and invading people’s privacy in search of “counterfeit currency,” as it describes it, ”said Mustafa Nasr, director of the Economic Media Center.
He added that the current economic war between the legitimate government and the Houthis would have an impact on the country’s troubled economy and people’s lives.
Nasr also criticized the Yemeni government for printing money without cover and for easily managing the foreign exchange market in the liberated provinces.
“The central bank’s supply of the new cash exacerbates the inflation problem and weakens the currency,” he said, advising the government to increase revenue and curb speculative activity by local money dealers in areas under their control.
“The fall of the riyal in areas under the control of the legitimate government is caused by currency speculation and corruption, not real demand for currency,” said Nasr.