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Yemeni Government Aims to Stop Houthis from Squandering State Funds Abroad | ASHARQ AL-AWSAT English Archive 2005 -2017
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Yemen’s Prime Minister Ahmed Obeid bin Daghr attends a news conference in Riyadh, Saudi Arabia May 18, 2016. REUTERS/Faisal Al Nasser

Yemen’s legitimate government has asked international financial institutions to prevent central bank officials from accessing state funds held in overseas banks, the state-run sabanew.net news agency reported on August 8.

The measure comes to prevent the Yemen crisis from aggravating, where a civil war has been raging between the Iran-allied Houthis, who control the capital Sanaa and the central bank and the internationally recognized government of Prime Minister Ahmed bin Daghr based in the southern port city of Aden.

Bin Daghr has received “confirmed information” that the central bank administration is tapping Yemeni foreign reserves held at banks in Europe and the United States after exhausting funds in Sanaa and elsewhere for the war effort, an official at the prime minister’s office told the news agency.

“Out of concern for the funds and belongings of the Yemeni people, and in order to preserve the remaining public funds, … the Yemeni government has decided to take this step, which includes suspending dealing with Central Bank Governor Mohammed Awad bin Humam,” the official was quoted as saying.

World powers have been concerned about the humanitarian situation in Yemen, where the United Nations says many provinces are on the verge of famine. More than 6,400 have been killed since March last year and some 2.5 million have been displaced.

The Yemeni government move came as U.N.-sponsored peace negotiations in Kuwait ended without an agreement after nearly three months of talks, paving the way for fresh fighting.

Last month, bin Humam said a second round of transfers of bank funds abroad to facilitate imports had been scheduled in days. His comments appeared to confirm what an official at a Yemeni government bank told Reuters a week earlier about a first batch of transfers taking place earlier this year.

Hadi’s government has accused the Houthis of squandering $4 billion in reserves held by the central bank on the war effort.

The reserves have fallen to around $1.1 billion from $4.7 billion at the end of 2014. The IMF put them at well below two months’ of imports, which it told Reuters was “very, very low”.