Yemen to Get $665m of IMF Reserves in New SDR Allocation


Mon, 23-08-2021 12:44 AM, Aden Time

ADEN (Reuters, South24)

Yemen will receive an estimated amount of $665 million worth of reserves from the International Monetary Fund (IMF) on Monday which will help ease an acute economic and humanitarian crisis in the war-torn country, the fund's regional representative for Yemen said.

The distribution is part of a $650 billion IMF allocation of Special Drawing Rights - the fund's unit of exchange backed by dollars, euros, yen, sterling and yuan - which states receive in proportion with their existing quota shareholding.

"The SDR allocation will boost Yemen's foreign exchange reserves by over 70%, providing much needed support to help address the crisis, including with the many urgent food and medical needs of the population," IMF regional representative Gazi Shbaikat said in a statement to Reuters.

The war, in which a Saudi-led coalition has been battling the Iran-aligned Houthis for over six years, has depleted foreign exchange reserves in Yemen, which imports the bulk of its goods. Around 80% of the population is reliant on aid.

To spend their SDRs, states would first have to exchange them for underlying hard currencies, requiring them to find a willing exchange partner country.

The Iranian-backed Houthis control North Yemen and its urban areas, while the Southern Transitional Council (STC) and the Riyadh Agreement's government control South.

Most of the ministers of the new cabinet left Aden, South Yemen, last March, amid accusations of failing to fulfill its obligations stipulated in the agreement signed between the STC and the regime of President Hadi.

Yesterday, Sunday, Yemeni Prime Minister Maeen Abdulmalik discussed developments at the political level, "including efforts to complete the implementation of the Riyadh Agreement in all its aspects, and mobilize the necessary support for the government to fulfill its obligations, and the ongoing discussions in this aspect with brothers and friends, including Saudi Arabia." According to the Yemeni news agency Saba.

In Aden, a team from the Security Council's sanctions committee on Yemen is conducting an investigation and reviews with local and financial authorities.

Local media said that the team discussed a number of issues related to the financial and economic situation. The team also briefed the local authority in Aden, the nature of its visit to Aden and the tasks assigned to it.

Sea and air restrictions imposed by the coalition on Houthi-held areas, including the country's main port of Hodeidah, have hampered the import of fuel and other goods, while the southern areas are witnessing a significant decline in services, a continuous collapse in the currency rate, and an interruption of employee salaries, amid popular discontent.

-Photo: Reuters