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Yemeni Central Bank Faces Bankruptcy Risk | ASHARQ AL-AWSAT English Archive 2005 -2017
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Houthis in police uniform search cars at a checkpoint in Sanaa November 4, 2014. REUTERS/Khaled Abdullah

Aden-Sana’a Central Bank is facing a bankruptcy risk after it fell short to cash in salaries due to consumption of monetary reserves of foreign currencies (USD five billion) as well as draining revenues.

Staff of some ministries and government institutions sparked strikes in Sana’a for not receiving their salaries.

Some of the protesting authorities were: Ministry of Telecommunication and Information Technology, Ministry of Finance, Civil Aviation and Meteorology Authority and Public Electricity Corporation.

Based on the Houthis’ previous practices, analysts expect sparks to expand to other state institutions that are controlled by the insurgents in Sana’a.

Sources in Sana’a revealed that the Central Bank received guidelines from the Houthis to direct majority of revenues and funds available in the budget of Ministry of Defense and Ministry of Interior to the military and to distribute the remaining on the state institutions.

The Yemeni government started earlier to besiege the Houthis financially through a directive issued by Yemeni Prime Minister Ahmed Obaid Bin Dagher to stop dealing with the Central Bank in Sana’a.

The Yemeni people are undergoing tough economic conditions amid the coup on legitimacy and state institutions; humanitarian organizations stated earlier that more than 21 million Yemenis live below the poverty threshold while more than three million were out-rooted.

However, the coup leaders are experiencing a financial hub that results from stealing the state institutions or dealing in the black market – which has become popular since two years – and arresting thousands of activists then releasing them in return for large amounts of money.

Yemeni economic experts said that the Central Bank administration has started to conduct internal borrowing and withdrawing from local banks, amid demands by many to disobey these procedures.