ADEN, Yemen, July 17 (Xinhua) -- UN Special Envoy for Yemen Hans Grundberg on Thursday condemned the recent issuance of new currency denominations by the Houthi-controlled central bank in Sanaa, calling it a violation of UN-brokered agreements and a threat to Yemen's already fragile economy.
In a press statement released through the social media platform X, the UN envoy expressed deep concern over the Houthis' minting of 50-rial coins and printing of 200-rial banknotes, calling such unilateral actions counterproductive to resolving Yemen's liquidity crisis.
"Such unilateral actions are not the solution to the liquidity crisis and risk further undermining Yemen's already fragile economy and deepening the fragmentation of its monetary and institutional frameworks," the envoy stated.
The UN envoy said the currency issuance violates the July 23, 2024 Understanding between the parties to de-escalate in the economic sphere, urging for coordinated approaches instead of unilateral actions at a time when Yemenis across the country face mounting economic pressures.
The Houthi group announced Tuesday the second issue of 200-rial banknotes, which entered circulation Wednesday, alongside the recent minting of 50-rial coins last week.
The Sanaa-based Central Bank, affiliated with the Houthi forces, said the currency release would not affect exchange rates and aimed to address the problem of damaged banknotes.
The bank indicated that it would study the need to mint and issue denominations below 50 rials over the next six months.
The Central Bank in Aden, representing the internationally recognized government, strongly rejected the new currency issuance, describing it as a "destructive act" and a "continuation of the economic war against the Yemeni people."
In a press statement, the Aden-based bank declared the currency "illegal" and accused the Houthis of aiming to "plunder citizens' resources and savings to finance suspicious networks with enormous sums without any legal or monetary cover."
The Aden bank warned that dealing in what it termed "counterfeit" currency could expose individuals and entities to potential sanctions, given that "it is issued by a party designated as a global terrorist organization."
The Aden bank regards the Houthi-controlled branch of the central bank in Sanaa as an illegitimate institution.
The currency dispute reflects Yemen's deepening economic fragmentation, with the country effectively operating under two separate monetary systems. Yemeni economic experts view the Houthis' actions as an escalation that creates a parallel economy to the legitimate government's system.
The Houthis, who have controlled much of northern Yemen -- including the capital Sanaa -- since the civil war erupted in late 2014, have imposed a ban on the entry of banknotes printed by the internationally recognized government into territories under their control. ■
