Saudi extends deposit for Yemen and pays $2bn instalment

Saudi Arabia has extended a deposit it gave the central bank of Yemen’s internationally recognised government in 2018, and agreed to pay the final instalment of the $2 billion support package it promised.

The Saudi finance ministry said the 2018 deposit would be extended to support Yemen’s currency and economic situation.

The Yemeni central bank – now based in Aden, the interim headquarters of Yemen’s government – said the final instalment amounted to $174 million.

In Yemen’s seven-year conflict, Saudi Arabia leads a military coalition that intervened against Yemen’s Iran-aligned Houthi group in 2015 after it ousted the internationally recognised government from power in the capital Sanaa the previous year.

The central bank is now split between Houthi-controlled Sanaa and the internationally recognised portion in Aden.

Saudi Arabia said last month it would arrange a new support package of $3 billion for Yemen’s economy: $2 billion from Riyadh and $1 billion from the United Arab Emirates, also part of the coalition.

Riyadh’s ambassador to Yemen, Mohammed al-Jaber, said on Twitter that governance and technical discussions were taking place about a new $2 billion deposit that would come from the UAE and Saudi.

The conflict has caused a serious devaluation of Yemen’s currency and a shortage of foreign reserves, and created what the United Nations calls the “world’s largest humanitarian crisis”.