HOUTHI-ISSUED 100 RIYAL COIN DEEPENS YEMEN’S ECONOMIC DIVIDE

Thu 04 April 2024:

For the first time in nearly a decade, Yemen’s Houthi-led de-facto government has announced the issuing of a newly minted 100 riyal coin on Saturday, a move which has prompted outcry from the internationally recognised government and its central bank based in Aden as a “dangerous escalation.”

The rival Sanaa-based Central Bank unveiled plans to circulate the new coin from yesterday to substitute banknotes of the same denomination that have been rendered damaged and unusable, reports Xinhua.

Hashim Ismail, the governor of the Sanaa central bank, told a press conference that “the currency is ready and has been minted in accordance with international standards.” He assured the public that introducing the new coin “will not affect exchange rates” as it is only intended to replace damaged 100 riyal notes.

🎥 البنك المركزي اليمني يعلن إصدار عملة معدنية فئة 100 ريال في إطار مواجهة مشكلة العملة التالفة#اليمن #يد_تحمي_ويد_تبني #المسيرة pic.twitter.com/GfDwJWG0DR

— قناة المسيرة (@TvAlmasirah) March 30, 2024

However, the central bank in Aden where the interim capital of the UN-recognised government is based described the move as “illegal” and “escalatory” and urged residents and financial institutions in Houthi-controlled areas to avoid using the new “fake” currency.

“The militia will be held accountable for this irresponsible escalation, as well as the resulting complexity and uncertainty in people’s transactions with financial and banking institutions,” the central bank in Aden said in a statement.

It has been reported that decision to mint the coins was undertaken in a bid to overcome the crippling economic crisis affecting the banking sector in Houthi-controlled areas. Sanaa is said to have taken this step after failing in attempts to print banknotes in China, India, and Russia.

Until late 2019, both governments used the same notes when the Sanaa government banned new banknotes printed in Aden, over concerns about inflation and the printing of counterfeited notes. This led to the value of the riyal plummeting in southern governorates, while its value remained relatively stable in those under the control of the Houthi-led Supreme Political Council.

Mustafa Nasr, director of the Taiz-based Studies and Economic Media Center, said that launching the new coin currency will deepen the economic divide and worsen the economic war between the opposing governments. He was quoted by Arab News as saying: “This measure serves as a test of the pulse to continue producing further monetary denominations of currency as needed, as well as establishing an independent economy.”

“Despite the higher expense of minting coins, the Houthi group prefers them because they are easier to mint and obtain.”

-MEMO

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