Arab Central Banks Endorse Relocation of Yemen's Central Bank

Arab central bank governors said on Friday they backed a move by Yemen’s exiled government to relocate the war-torn country’s central bank to the city of Aden, the main foothold of fighters loyal to President Abd-Rabbu Mansour Hadi.

President Hadi announced the move from Saudi Arabia late on Sunday. Hadi’s forces control Aden, while the Houthis rule the capital, Sanaa, in the north.

The exiled government also appointed a new central bank governor and said it would move the bank’s headquarters from the rebel-held capital Sanaa to the southern port city of Aden

This step aims at ramping up pressure on Houthi rebels.

At a meeting in Morocco on Thursday Arab central banks said they supported the decision to relocate the central bank and would provide it with “necessary support”, according to a statement on Saudi state news agency SPA.

The central bank has been the last bastion of the impoverished country’s financial system amid a civil war and is effectively running the economy, according to central bank officials and diplomats.

Hadi is backed by a Saudi-led Arab coalition, which has been waging an offensive against Iran-aligned Houthi forces since 2014.

The government has accused the Houthis of squandering some $4 billion on the war effort from central bank reserves, though the Houthis say the funds were used to finance imports of food and medicine.

President Hadi addressed on Tuesday the leaders of 193 countries at the U.N. headquarters in New York, who are there to tackle global and national issues.

Referring to the decision to relocate the bank’s headquarters, Hadi said the U.N. “has shown the Houthi/Saleh militias that they can’t simply stall peace-making endlessly. The international community’s support for relocating the Central Bank is a clear sign of this.”

Hadi blamed Iran for supporting the Houthis, who are battling the popular resistance and forces loyal to Hadi’s government.

“We find ourselves mixed in this battle, this fight for the country and the legitimacy of the state, to ensure that the country not fall into the hands of Iran, which would like to see the destruction of the country,” Hadi told the UNGA. “You are aware of the human tragedy of our people, and this is due to the blockade imposed by the militias.”

Following the 2011 uprising against Yemen’s then-President Ali Abdullah Saleh, several events occurred that led to the country’s political turmoil. As factions fought for control of Yemen, the power vacuum led Houthi militias to take advantage of instability and rising fuel prices to oust Hadi’s government in Sept. 2014.

Arab Central Banks Endorse Relocation of Yemen's Central Bank