Saudi grants $250 million to Yemen budget for salary support, says central bank Governor

Saudi grant Yemen: Yemen is set to receive a second installment of $250 million from Saudi Arabia's one-year $1 billion grant, which will bolster the country's budget and support salary payments, according to the central bank governor.

Ahmed bin Ahmed Ghaleb Al-Maabqi informed Reuters that this significant financial injection is expected to be reflected in Yemen's budget either on Sunday or Monday. The allocation aims to provide crucial support amid ongoing economic challenges, particularly in addressing salary payments.

The remaining $500 million of the grant, which began with an initial disbursement of $250 million last August, is yet to be transferred to Yemen's central bank, headquartered in the southern port city of Aden.

Yemen's central bank plays a vital role in assisting the Saudi-backed government, which continues to grapple with a range of economic difficulties, including a weakened currency, soaring fuel prices, and inflation in commodity costs.

Since 2015, Riyadh has led a military coalition in Yemen against the Iran-aligned Houthi rebels. The conflict erupted when the Houthis ousted the internationally recognized government from the capital, Sanaa, compelling it to relocate to Aden.

Al-Maabqi underscored that the latest $250 million installment is earmarked for covering salary payments for several months, aiming to alleviate the financial burden on Yemeni citizens, and enable them to afford essentials such as food.

However, Al-Maabqi highlighted the adverse impact of recent attacks by the Houthi rebels on commercial vessels in the Red Sea. These incidents have further exacerbated Yemen's already dire economic crisis, aggravating the humanitarian situation in the war-torn country.

"The situation is already hard as a result of the war going on for more than eight years. With Houthi attacks on oil facilities (in Yemen) and exports halting, the Red Sea attacks have exacerbated the situation," Al-Maabqi stated on the sidelines of the 2024 World Governments Summit in Dubai.

In recent months, the Houthis have intensified their attacks on international shipping in the Red Sea, purportedly in solidarity with Palestinians against Israel. These actions have drawn retaliatory strikes from the United States and Britain, further complicating the regional security landscape.

The Houthis have stated their intention to continue these strikes until a ceasefire agreement is reached between Israel and Gaza's ruling Islamist movement, Hamas. They demand unrestricted access to food and medicine in Gaza to alleviate the ongoing humanitarian crisis.

(With Reuters inputs.)