ADEN // The Yemen central bank branch in Aden is an unremarkable government building, some of its sand-coloured walls and tall windows pockmarked with bullet holes from street battles fought nearby during the city’s liberation from northern rebel forces.
But last week, after president Abdrabu Mansur Hadi announced that the building in Al Aidarous neighbourhood will soon become the country’s central bank headquarters, it has quickly become conspicuous, as it now represents the centre of a new economic dimension to the war.
The streets around it are now blocked off and patrolled by security personnel, while people who want to enter the bank for business must pass through several layers of security. On a recent afternoon two soldiers sat on an orange water cooler in the back of a pickup truck with a .50 calibre machine gun mounted on it.
Officials in the internationally-recognised Hadi administration have said the government had no choice but to unilaterally relocate the bank from the capital Sanaa to territory they control. They say the bank is on the verge of insolvency, largely because it was being drained by the rebel alliance of Houthis and military forces loyal to former president Ali Abdullah Saleh to fund their war efforts against pro-government forces and the Saudi-led coalition.
They claim that less than US$700 million (Dh2.57 billion) is left in Yemen’s foreign exchange reserves, far lower than the estimate of $1.3bn in reserves the bank held in June, and down from $5.2bn in September 2014. The halting of oil exports and the inability of the state to collect taxes during the conflict contributed to the financial crisis. But the government claims that the rebels were the main cause.
“It has become obvious that the Yemeni Central Bank in Sanaa financed the putschists at government expense and therefore has totally lost its neutrality and independence,” Monasser Saleh Al Quaiti, the newly appointed governor of the bank, said last Monday in Riyadh, where he is currently based.
Bank officials in Sanaa have denied any collusion with the rebels. Its veteran governor, Mohammed bin Humam, was allowed by both sides of the conflict to steer bank policy because he was viewed as a skilled and independent technocrat — a view still widely held by officials in the Gulf and among western diplomats in the region.