Fight for control of Yemen’s banks between government, Houthis threatens to further wreck economy

Fight for control of Yemen’s banks between government, Houthis threatens to further wreck economy
People visit a livestock market in Sanaa, Yemen, before the Eid Al-Adha holiday on June 15, 2024. (AP)
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Updated 18 June 2024
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Fight for control of Yemen’s banks between government, Houthis threatens to further wreck economy

Fight for control of Yemen’s banks between government, Houthis threatens to further wreck economy
  • The Houthis who control the north and center of the country and the government running the south use different currency notes with different exchange rates
  • Yemen has been torn by civil war ever since the Iranian-backed Houthi rebels took over Sanaa and much of Yemen’s north and center in 2015

SANAA, Yemen: Yemen’s Houthi rebels and its internationally recognized government are locked in a fight for control of the country’s banks that experts warn is threatening to further wreck an economy already crippled by nearly a decade of war.
The rivalry over the banks is throwing Yemen’s financial system into deeper turmoil. Already, the Houthis who control the north and center of the country and the government running the south use different currency notes with different exchange rates. They also run rival central banks.
The escalating money divide is eroding the value of Yemen’s currency, the riyal, which had driven up prices for clothing and meat before the Islamic holiday of Eid Al-Adha started on Sunday.
For weeks, Yemenis in Houthi-controlled areas have been unable to pull their money out of bank savings accounts, reportedly because the Houthi-run central bank, based in the capital, Sanaa, has stopped providing liquidity to commercial and government banks. Protests have broken out in front of some banks, dispersed by security forces.
Yemen has been torn by civil war ever since the Iranian-backed Houthi rebels took over Sanaa and much of Yemen’s north and center in 2015. The Saudi-backed internationally recognized government and its nominal ally the Southern Transitional Council, a group supported by the United Arab Emirates, govern the south and much of the east, centered in the southern port city of Aden.
Yemen was already the Arab world’s poorest country before the war began. Punitive actions by each side against the other’s banks over the past week now threaten to undermine merchants’ ability to import food and basic commodities and to disrupt the transfer of remittances from Yemenis abroad, on which many families depend, said Edem Wosornu, director of operations and advocacy for the UN humanitarian coordination office known as OCHA.
“All these factors will likely deepen poverty, worsen food insecurity and malnutrition, and increase reliance on humanitarian assistance,” she told a UN Security Council briefing on Thursday. The dispute could escalate to the point that banks in Houthi-run areas are barred completely from international financial transactions, which she said would have “catastrophic ramifications.”
The internationally recognized government moved the central bank to Aden in 2016, and since then began issuing new banknotes to replace worn-out riyals. Houthi authorities, which set up their own central bank in Sanaa, banned the use of the new money in areas under their control.
In March, the Houthi-controlled central bank announced it was rolling out its own new 100-riyal coins. The international community and Yemen’s recognized government denounced the move, saying the Houthis were trying to set up their own financial system and warning it will deepen Yemen’s economic divide.
Adding to the confusion, the bills have different exchange rates — riyals issued in Sanaa go for about 530 to the dollar, while those from Aden are around 1,800 to the dollar.
In response, the Aden-based central bank gave banks 60 days to relocate their headquarters to the southern city and stop operating under Houthi policies, or else risk facing sanctions related to money laundering and anti-terrorism laws.
The central bank was “forced to make these decisions, especially after the Houthi group issued their own currency and took unilateral steps toward complete independence from the internationally recognized Central Bank in Aden,” said Mustafa Nasr, an economic expert and head of the Studies and Economic Media Center SEMC.
No banks met the deadline — either because they needed more time or because they feared Houthi sanctions if they moved, Nasr said.
When the deadline ran out last week, the central bank in Aden banned dealing with six banks headquartered in Sanaa, meaning currency exchange offices, money transfer agencies and banks in the south could no longer work with them.
In retaliation, the Houthi-run central bank in Sanaa banned all dealings with 13 banks headquartered in Aden. That means people in Houthi-controlled areas can’t deposit or withdraw funds through those banks or receive wire transfers made through them.
Even as the fight for control is going on, both sides are facing a cash crunch. The Houthi government has few sources of foreign currency and its new coins aren’t recognized outside its territory.
In January, the United States designated the Houthis as a global terror group in response to the rebels’ attacks on shipping in the Red Sea and Arabian Sea. The Houthis say the attacks are in retaliation for the Israel-Hamas war in the Gaza Strip. Because of the US decision, banks around the world might be concerned and reluctant to continue any financial dealings with banks that have headquarters under Houthi control, said Youssef Saeed, a University of Aden economic professor.
The economy in Aden isn’t significantly better. The government’s revenues have been hit hard ever since Houthi attacks on oil ports in late 2022 forced a halt in oil exports, the main earner of foreign currency.
Since March, depositors in Houthi-run areas have been unable to pull money out of their accounts. The central bank in Sanaa hasn’t announced any formal restrictions, but several economists told The Associated Press that it has informally stopped releasing funds that individual banks have put in its coffers — in part because of a lack of liquidity.
At one bank that saw protests by depositors last month, the International Bank of Yemen, a note hung in the lobby said, “In coordination with the Central Bank, withdrawals from old accounts have been suspended until further notice.”
Um Ahmed, a 65-year-old woman who was among those protesting outside the bank, said that she was trying to withdraw money to help her son buy a motor scooter for work, but the bank refused.
“I served this country as a teacher for 35 years and saved every penny and deposited my money at the bank, but they took it all,” she said. “This money belongs to my husband and me and our children.”
 


Aoun: Hezbollah is cooperative on the weapons issue

Aoun: Hezbollah is cooperative on the weapons issue
Updated 48 min 7 sec ago
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Aoun: Hezbollah is cooperative on the weapons issue

Aoun: Hezbollah is cooperative on the weapons issue
  • Joseph Aoun: ‘Israel is the one violating this agreement by remaining in the five hills, while Lebanon seeks to preserve this agreement’
  • Aoun: ‘Reforms are more a Lebanese necessity than an international demand’

BEIRUT: Lebanon’s President Joseph Aoun said that “the Lebanese army is carrying out its duties fully in southern Lebanon,” adding that “the state is committed to implementing Resolution 1701.”

He also announced that “Hezbollah is cooperative on the weapons issue,” noting that “dialogue is the key to solutions.”

His statements came on the eve of his expected visit to Paris and his participation in a summit with his French counterpart Emmanuel Macron.

In an interview with France 24, Aoun said that “the ceasefire agreement must be upheld by all parties,” noting that “Israel is the one violating this agreement by remaining in the five hills, while Lebanon seeks to preserve this agreement.”

He added: “Diplomatic calls are being carried out regarding this matter, and guarantees must come from France and the US, which are partners in the Quintet Committee tasked with monitoring the implementation of the agreement.”

Aoun affirmed Lebanon’s commitment to reforms,” adding that “we don’t have any other option.”

He said: “Reforms are more a Lebanese necessity than an international demand.”

Meanwhile, the Cabinet held a meeting at the Presidential Palace, chaired by Prime Minister Nawaf Salam, during which a new central bank governor was appointed.

The governor was chosen by voting rather than consensus, but Salam, the Sunni ministers in the government, and ministers Tarek Metri and Ghassan Salameh did not vote for the new governor.

The appointment of Karim Saeed came after a prolonged vacancy in the governorship, which resulted from the failure to elect a president for the republic for more than two years, alongside the arrest of the former central bank governor, Riad Salameh, on charges of embezzlement.

The new governor received 17 votes out of 24, following his responses to the ministers’ questions.

Saeed, 61, was included in a list of three names submitted by Finance Minister Yassine Jaber to the Cabinet, alongside Eddy Gemayel and Jamil Baz.

Saeed’s name is associated with what is known as the “Harvard Plan” for addressing the economic crisis in Lebanon, which was funded by Growthgate Capital.

Saeed is a founding partner and managing partner at Growthgate Equity Partners in the UAE, a firm specializing in alternative asset management that invests in private companies throughout the Middle East and North Africa. He previously held the position of general manager of Investment Banking Services at HSBC.

Additionally, he served as a board member at Emirates Lebanon Bank.

Meanwhile in southern Lebanon, Israeli military drones killed four people in less than 24 hours.

Lebanon’s Foreign Minister Youssef Rajji received a phone call from his Egyptian counterpart, Badr Abdel Ati. The two men discussed “Egypt’s efforts to curb Israel’s ongoing escalation in southern Lebanon, urging it to withdraw from the occupied Lebanese territories and adhere to the declaration of a ceasefire.”

Two guided missiles hit a car in Yohmor Al-Shaqif, resulting in three deaths, according to the Ministry of Health.

Israeli army spokesman Avichay Adraee claimed that the missile strikes targeted Hezbollah operatives who were reportedly transporting weapons.

The Ministry of Health also reported the death of another man, who was killed by an Israeli drone strike near Maaroub, Tyre.

The Israeli army claimed responsibility for killing “Ahmad Adnan Bajjiga, a battalion commander in Hezbollah’s Radwan Force, in the Derdghaiya area of southern Lebanon.”

Security reports indicate that Israel has resumed its attacks on Hezbollah in Lebanon, despite the ceasefire agreement between the two parties, which went into effect on Nov. 27, 2024.

These attacks have resulted in at least 105 deaths — comprising Hezbollah members, civilians and military personnel — and left around 300 others wounded.

The war, which Hezbollah launched in support of Gaza on Oct. 8, 2023, along with the subsequent ground war initiated by the Israeli army in Lebanon until the cessation of hostilities on Nov. 27, 2024, has killed 3,961 and injured 16,520, according to the Emergency Committee.


Chinese ambassador affirms respect for Syria’s sovereignty during meeting with FM

Chinese ambassador affirms respect for Syria’s sovereignty during meeting with FM
Updated 27 March 2025
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Chinese ambassador affirms respect for Syria’s sovereignty during meeting with FM

Chinese ambassador affirms respect for Syria’s sovereignty during meeting with FM
  • Syria’s Foreign Minister Asaad Al-Shaibani welcomed China’s stance on Israeli violations

LONDON: Asaad Al-Shaibani, Syria’s foreign minister, received a delegation from China headed by the ambassador to Syria, Shi Hongwei.

Shaibani welcomed China’s stance on the continuing Israeli violations of Syria’s sovereignty in the southern region of the country, the SANA agency reported on Thursday.

The Chinese ambassador affirmed his country’s respect for Syria’s territorial integrity and independence, as well as its non-interference in the internal affairs of other countries. He highlighted China’s backing for Syria during its post-civil war transition.

Israel has continued its bombing campaign in Syria even after the ousting of Bashar Assad, whose regime came to an end last year after a rebel advance forced him to flee to Russia.

An Israeli attack this week on the Syrian village of Kuwayya in the southern Daraa province led to the death of at least six civilians.

Shaibani and Hongwei expressed their willingness to enhance cooperation and achieve prosperity, progress and peace between both countries, SANA added.


Lebanon cabinet appoints wealth manager central bank governor: official media

Lebanon cabinet appoints wealth manager central bank governor: official media
Updated 27 March 2025
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Lebanon cabinet appoints wealth manager central bank governor: official media

Lebanon cabinet appoints wealth manager central bank governor: official media
  • Souaid officially takes over after embattled former chief Riad Salameh’s term expired in July 2023 with no designated successor

BEIRUT: Lebanon’s cabinet on Thursday named asset manager Karim Souaid as central bank governor, official media reported, a post crucial to implementing economic reforms demanded by the international community.
He was appointed despite reservations of new reformist prime minister Nawaf Salam, who called on Souaid to commit to the government’s reform agenda in a country enduring a five-year economic collapse widely blamed on official mismanagement and corruption.
“The cabinet appointed Karim Souaid as central bank governor,” the official National News Agency said.
Born in 1964, Souaid officially takes over after embattled former chief Riad Salameh’s term expired in July 2023 with no designated successor.
Divided politicians had since failed to agree on a permanent replacement for Salameh, who has been accused at home and abroad of financial crimes.
First vice-governor Wassim Manssouri had been acting head of the central bank, a post that is traditionally reserved for a Maronite Christian in Lebanon’s sectarian power-sharing system of governorship.
Souaid is the founder and managing partner at Gulf-based Growthgate, according to his biography on the private investment firm’s website.
It says he previously worked at financial establishments including HSBC Bank and has been involved in privatization initiatives in a number of Arab countries.
Some local media have reported that Souaid is close to the banking sector and members of Lebanon’s entrenched ruling class.
Salam said he had “reservations” about Souaid’s appointment but did not give specifics except to cite his “desire to protect depositors’ rights and preserve the state’s assets.”
He said Souaid “must adhere, from today, to the financial policy of our reformist government... on negotiating a new program with the International Monetary Fund, restructuring the banks, and presenting a comprehensive plan” to preserve depositors’ rights.
Lebanon’s new authorities need to carry out reforms demanded by the international community to unlock bailout funds.
The economic crash since 2019 has seen the local currency lose most of its value against the dollar and pushed much of the population into poverty, with people locked out of their savings.
Salam also said the cabinet approved Thursday “a draft law aiming to modify legislation on banking secrecy.”
In April 2022, Lebanon and the IMF reached conditional agreement on a $3-billion-dollar loan package, but painful reforms that the 46-month financing program would require have not been undertaken.
Earlier this month, the IMF welcomed the new Lebanese government’s request for support in addressing the country’s severe economic challenges.
In February, it said it was open to a new loan agreement with the country following discussions with its recently appointed finance minister.
Beirut-based think tank the Policy Initiative in a statement Wednesday said that the nomination of central bank chief would “test the new government’s commitment to genuine reform.”
“The next governor will shape Lebanon’s urgent reform agenda, serve as the main counterpart to the International Monetary Fund, and directly engage in sovereign debt restructuring negotiations” alongside the finance ministry, it said.
Souaid studied law at Lebanon’s St. Joseph University and at Harvard Law School in the United States, according to his biography.
He has also worked as a corporate finance attorney in New York, and is a member of the New York State Bar Association, it says.
The central bank governor in Lebanon is named by cabinet decree for a six-year mandate that can be renewed multiple times, based on the finance minister’s recommendation.


Egypt sees positive signals on Gaza ceasefire talks, sources say

Smoke billows from an Israeli strike at Bureij camp in the central Gaza Strip, on March 27, 2025. (AFP)
Smoke billows from an Israeli strike at Bureij camp in the central Gaza Strip, on March 27, 2025. (AFP)
Updated 27 March 2025
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Egypt sees positive signals on Gaza ceasefire talks, sources say

Smoke billows from an Israeli strike at Bureij camp in the central Gaza Strip, on March 27, 2025. (AFP)
  • The proposal suggests Hamas release five Israeli hostages each week, sources said
  • A security delegation from Egypt has left for Qatar for talks, which will include increasing aid to the enclave and releasing remaining hostages

CAIRO: Egypt, one of the mediators in the Gaza ceasefire negotiations, has received positive indications from Israel over a new ceasefire proposal that would include a transitional phase, security sources told Reuters on Thursday.
The proposal suggests Hamas release five Israeli hostages each week, sources said.
A security delegation from Egypt has left for Qatar for talks, which will include increasing aid to the enclave and releasing remaining hostages, state-affiliated Al Qahera News TV said on Thursday.
Violence has escalated in Gaza since a January truce broke down on March 18 after two months of relative calm.
Asked about the latest proposal, a Palestinian official close to the mediation efforts said “there are some offers that look better than the previous ones.”
When asked if he expects an announcement on a breakthrough on Thursday, he replied: “Maybe not yet.”
There was no immediate response from Israeli Prime Minister Benjamin Netanyahu’s office on the proposal, but a spokesperson said there is currently no Israeli delegation in Doha.
Israel and Hamas accused each other of breaching the truce, which had offered respite from war for the 2.3 million inhabitants of Gaza, which has been reduced to rubble.
Hamas, which still holds 59 of more than 250 hostages Israel says the group seized in its October 7, 2023 attack, accuses Israel of jeopardizing efforts by mediators to negotiate a permanent deal to end the fighting.
Israel says it would be willing to extend the ceasefire temporarily if Hamas releases more hostages, but without moving yet to a second phase during which it would negotiate a permanent end to the war.
Israel also said it won’t accept Hamas prescence in the enclave and added it wanted to extend the ceasefire’s temporary first phase, a proposal backed by US envoy Steve Witkoff
More than 50,000 Palestinians have been killed in the fighting, Gaza health officials say.


Lebanon Druze leader accuses Israel of exploiting minority in Syria

Lebanon Druze leader accuses Israel of exploiting minority in Syria
Updated 27 March 2025
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Lebanon Druze leader accuses Israel of exploiting minority in Syria

Lebanon Druze leader accuses Israel of exploiting minority in Syria
  • Walid Jumblatt: Israel wants ‘to implement the plan it has always had... which is to break up the region into confessional entities and extend the chaos’
  • Jumblatt: ‘They want to annihilate Gaza, then it will be the West Bank’s turn... they are trying to destabilize Syria, through the Druze but also others’

BEIRUT: Lebanese Druze leader Walid Jumblatt has accused Israel of exploiting followers of his minority faith in Syria as part of a broader plan to divide the Middle East along sectarian lines.
Israel wants “to implement the plan it has always had... which is to break up the region into confessional entities and extend the chaos,” said Jumblatt, a key figure in Lebanese politics for more than four decades.
“They want to annihilate Gaza, then it will be the West Bank’s turn... they are trying to destabilize Syria, through the Druze but also others,” he told AFP in an interview Wednesday.
“It’s a dangerous game.”
Israel has been making overtures toward Syria’s Druze community since Islamist-led rebels ousted longtime ruler Bashar Assad in December after more than 13 years of war.
Since then, Israel has sent troops into the UN-patrolled buffer zone along the armistice line on the Golan Heights, and war monitor the Syrian Observatory for Human Rights has reported regular Israeli incursions deeper into southern Syria.
The Druze faith has followers in Israel, Lebanon and Syria, including the Israeli-annexed Golan Heights.
They account for about three percent of Syria’s population and are concentrated in the southern province of Sweida.
This month, Israeli government spokesman David Mencer said 10,000 humanitarian aid packages had been sent to “the Druze community in battle areas of Syria” over the past few weeks.
“Israel has a bold alliance with our Druze brothers and sisters,” he told journalists.

Israel also authorized the first pilgrimage in decades by Syrian Druze clerics to a revered shrine in Israel.
Defense Minister Israel Katz said Israel would not allow Syria’s new rulers “to harm the Druze,” following a deadly clash between government-linked forces and Druze fighters in the suburbs of Damascus.
Druze leaders rejected Katz’s warning and declared their loyalty to a united Syria.
Druze representatives have been negotiating with Syria’s new authorities on an agreement that would see their armed groups integrated into the new national army.
The talks had almost reached completion but “Israeli pressure” on some parties prevented the accord from being finalized, a source close to the negotiations told AFP, requesting anonymity as the matter is sensitive.
Jumblatt noted that during the French mandate in the 1920s and 1930s, “Syria was divided into four entities: an Alawite state, a Druze state, the state of Damascus and the state of Aleppo,” the latter two being Sunni Muslim.
“The Druze, with the other Syrian nationalists, were able to prevent the division of Syria” by launching a revolt and the plan later collapsed, he said.
He expressed hope that any new division of Syria could be avoided, appealing to Arab leaders to support interim President Ahmed Al-Sharaa.

Jumblatt in December was the first Lebanese official to meet Sharaa after his Islamist group spearheaded the offensive that ousted Assad.
Sharaa told Jumblatt that Syria would no longer exert “negative interference” in Lebanon, after Assad’s dynasty was accused of destabilising Lebanon for years and assassinating numerous Lebanese officials, including Jumblatt’s father.
Kamal Jumblatt, who founded the Progressive Socialist Party and opposed Assad’s father Hafez over his troops’ intervention in the Lebanese civil war, was killed near the Syrian border in 1977.
This month, Syrian security forces arrested former intelligence officer Ibrahim Huweija, suspected of numerous killings including that of Jumblatt’s father.
“He’s a big criminal, he also committed crimes against the Syrian people and should be tried in Syria,” Jumblatt said.
Lebanon’s new authorities have been under pressure since a devastating war between Israel and the Iran-backed Hezbollah group, an Assad ally, Jumblatt said.
“The Americans want Lebanon to normalize ties with Israel,” he said.
Under a November ceasefire, Hezbollah was to withdraw fighters from the border area and dismantle its military infrastructure there.
The Israeli army was also to withdraw but troops are still deployed in five positions inside Lebanon that it deems strategic.