Signs of imminent economic collapse in Saudi-held yemeni Regions
ADEN, Jan. 31 (YPA) – Yemeni regions under Saudi control are facing a worsening economic crisis, with signs of a potential new financial collapse. Analysts say Saudi financial policies are recycling failed measures rather than offering sustainable solutions to the country’s deteriorating economy.
Despite media reports of “Saudi support” to pay delayed salaries, the aid offers only temporary relief and risks triggering a cash crisis.
In a concerning development, the Central Bank in Aden has reportedly taken steps that could have serious economic consequences, including the release of three containers carrying large amounts of currency printed without monetary backing, originally printed in 2018.
According to media sources, these containers had been held at the port for nearly eight years. Insider sources suggest the funds were initially withheld due to awareness of the economic catastrophe their release could trigger, following the major collapse of the Yemeni riyal.
The previous injection of massive, unbacked currency by the coalition-aligned government caused a sharp surge in the US dollar exchange rate, which today stands at around 1,670 riyals in these regions, after previously exceeding 2,000 riyals amid continued instability.
Saudi “Support” Reveals a Different Reality
On January 19, Shaya al-Zindani, Prime Minister of Saudi-backed government, ordered the payment of overdue salaries to civilian and military employees in Saudi-controlled areas, citing financial support from Saudi Arabia during a meeting in Riyadh.
However, as payments began, the true nature of this “support” emerged. Analysts say it relies not on new funds or real monetary backing, but on previously printed currency that had been frozen for years due to its risk to currency stability.
Experts warn the move could repeat the post-2015 crisis, when the release of unbacked currency sparked severe inflation, soaring exchange rates, and record-high U.S. dollar values, further destabilizing an already fragile regional economy.
Recycling Collapse: Saudi Policy in Yemen
These measures reflect that Saudi Arabia is not pursuing genuine economic reforms in the areas it controls, but is instead recycling crises by releasing previously printed currency—kept dormant for years due to its risks—under the guise of paying salaries.
Economists say that even if the goal is to address liquidity shortages, it should not come at the expense of the already fragile economic stability.
They warn that releasing these funds could trigger a sharp rise in the dollar-to-riyal exchange rate, spark a new wave of inflation in basic goods and services, and further erode citizens’ remaining purchasing power.
In conclusion, these developments show that Saudi “support” is not genuine economic assistance but a step toward a new financial collapse, reusing tools that previously caused a lasting monetary crisis. Rather than addressing the root causes of Yemen’s economic turmoil, these risky policies threaten what remains of the fragile economy and leave ordinary citizens to bear the full cost.
@E.Y.M