Yemen’s Houthi militia has
issued a new 100-riyal coin for the first time in nearly a decade, a
move that sparked the ire of the Aden-based central bank.
Hashem Ismael, the governor of the
Houthi-controlled central bank, revealed during a news conference in
Sanaa on Sunday that they had produced a new 100-riyal coin, which will
go into circulation on Sunday and replace the damaged 100-riyal
banknote.
The Houthi official did not provide many details as to
how they minted the new currency but did state that it was coined in
accordance with the “latest international specifications and standards”
and that they planned to introduce coin currencies in lesser quantity.
In
Aden, the central bank described the Houthi move as “illegal” and
“escalatory” and urged residents and financial institutions in
Houthi-controlled areas to avoid using the new “fake” currency.
“The
militia will be held accountable for this irresponsible escalation, as
well as the resulting complexity and uncertainty in people’s
transactions with financial and banking institutions,” the central bank
in Aden said in its statement.
The Houthi central bank allayed
concerns about the potential devolution of the Yemeni riyal in certain
areas or the legal grounds for issuing the new coin currency by stating
that the new currency would replace existing banknotes in the market
that are in short supply and that the new coin was issued under the
bank’s regulations.
Yemen is separated into two economic areas:
one in the southern city of Aden, held by the internationally recognized
Yemeni government, and the other in Sanaa, controlled by Iran-backed
Houthis.
The Yemeni government moved the central bank’s
headquarters from Sanaa to Aden in 2016 after accusing the Houthis of
stealing the bank’s funds and using them to support their war effort.
The
Houthis replied by ceasing to pay public employees in regions under
their control, as well as prohibiting residents from using Aden-issued
banknotes.
The Houthis also began an economic war against the
Yemeni government, preventing traders from importing commodities through
Yemeni government-controlled ports and attacking oil terminals in
Hadramout and Shabwa.
In the Houthi territory, the Yemeni riyal
is traded at 533 riyals per dollar, whereas in government-controlled
territories, it is traded at 1,661 riyals per dollar.
When the Houthis seized power by force in late 2014, the riyal traded at 215 per dollar.
Mustafa
Nasr, director of the Studies and Economic Media Center, said that
launching the new coin currency will deepen the economic divide and
worsen the economic war between the Yemeni government and the Houthis.
He added that the Houthis would issue further new currencies.
“This
measure serves as a test of the pulse to continue producing further
monetary denominations of currency as needed, as well as establishing an
independent economy,” Nasr said.
He argues that the impact of
the Houthi move will be determined by responses from Aden’s central bank
and international monetary agencies, as well as the volume of the new
coin money in circulation.
“Despite the higher expense of minting coins, the Houthi group prefers them because they are easier to mint and obtain.”
Meanwhile,
Yemen’s government and human rights advocates have accused the Houthis
of attempting to cover up the deaths of people in the central province
of Radda after blowing up their homes.
On March 19, the Houthis
detonated a house in Radaa, Al-Bayda, killing at least nine civilians
from one family and injuring dozens more.
The Houthis agreed to
reconstruct the damaged houses, recompense the families of the deceased,
and prosecute those responsible for the deaths.
Nasser Ali
Al-Sanae, a Yemeni activist from Radaa who fled Houthi repression and
now lives in Marib city, says that the Houthis forced Ibrahim Al-Raimi,
the family’s last living member, to sign a document to bury his family
and that the Houthis have not tried any of the soldiers who blew up the
houses.