Yemen will receive $665 million in reserves from the International Monetary Fund (IMF) on Monday, which would contribute to alleviating the country’s extreme economic and humanitarian crises, according to the fund’s regional representative for Yemen.
The distribution is part of a $650 billion IMF allocation of Special Drawing Rights (SDR), the fund’s currency backed by dollars, euros, yen, pounds, and yuan, which governments receive in accordance with their existing quota shareholding.
“The SDR allocation will boost Yemen’s foreign exchange reserves by over 70 percent, providing much-needed support to help address the country’s crises, including the many urgent food and medical needs of the population,” IMF regional representative Gazi Shbaikat said in a statement.
Yemen’s foreign exchange reserves have been reduced by the war, in which a Saudi-led coalition has been fighting the Iran-aligned Houthis for almost six years. Yemen imports the majority of its products. Around 80 percent of the population is in need of assistance.
States would have to exchange their SDRs for underlying hard currencies before spending them, which would require finding a willing exchange partner country.
Yemen is split between the internationally recognized government in the south and the Houthi group, which took over the capital, Sanaa, in late 2014 and now controls the majority of the north and major cities.
To offset the shortfall, the Saudi-backed administration, which is struggling to pay public sector wages, has resorted to printing money.
The coalition’s sea and air restrictions on Houthi-held areas, notably the country’s main port of Hodeidah, have impeded petroleum and other supplies imports.