SANAA, Yemen (AP) — Saudi Arabia has given a $200 million cash infusion to Yemen’s Central Bank to shore up its reserves after the war-torn country’s currency went into freefall over the past few weeks.
The Yemeni rial has lost nearly half of its value this year and traded 800 rials to the dollar on Monday, sending food and fuel prices soaring. The state-run Saudi Press Agency says the “donation” will help “achieve stability of the Yemeni economy and boost the local currency.”
A Saudi-led coalition backing Yemen’s internationally recognized government has been at war with the country’s Shiite rebels, known as Houthis, since 2015. The government controls the south, where its Central Bank is located, while the Houthis control the north of the country.
The fighting has killed over 10,000 people and pushed Yemen, with a population of 29 million, to the brink of famine.
In the Yemeni capital, Sanaa, grocery stores and supermarkets were closed on Tuesday and long lines of cars were seen outside gas stations. Many exchange offices shut down in Sanaa and the southern port city of Aden.
Protesters have taken to the streets over the past days in the south, blocking roads and burning tires, demanding President Abed Rabbo Mansour Hadi sack his government over its failure to improve the economy.
Because of the war, Yemen has largely lost its main source of foreign currency from oil and gas exports, which amounted to nearly 70 of the country’s revenue. Moving the Central Bank from the Houthi-controlled Sanaa to Aden left more than 1 million state employees in the north without a steady income.
Many Yemenis in the south also blame the coalition for failing to better prop Hadi’s government and help rebuild southern cities destroyed in the fighting with the Houthis.
The coalition has also imposed a land, sea, and air embargo on Yemen, raising the price of imports. Ninety percent of Yemen’s food and fuel are imported.
The worsening economy comes as the coalition is battling to dislodge the Houthis from the vital port city of Hodeida, the main entry point for Yemen’s imports and aid.