New Houthi coin triggers economic divide in Yemen

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.