Yemen's Deepening Financial Crisis: A Struggle for Control

Yemen's Houthi rebels and the internationally recognized government are in a conflict over the control of the country's banks, exacerbating an already fragile economy. The divide has led to different currency notes and exchange rates, causing economic disruptions and deepening poverty, food insecurity, and reliance on humanitarian aid.

Yemen's Houthi rebels and the internationally recognized government are embroiled in a fierce struggle over the control of the country's banks, a situation experts caution could catastrophically worsen the war-torn nation's economy. This financial battle is further destabilizing Yemen's already fragile financial system.

The Houthis, who dominate the north and center, and the government, administering the south, have distinct currency notes and diverging exchange rates. Both factions operate competing central banks, intensifying the economic divide and devaluing Yemen's currency, the riyal, driving up prices of essential goods.

The crisis peaked weeks before Eid al-Adha, as residents in Houthi-controlled regions found themselves unable to access bank savings, leading to protests swiftly quashed by security forces. This financial stagnation threatens vital import activities and remittance transfers, deepening poverty, food insecurity, and dependence on humanitarian assistance, UN officials warned.

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