Houthi banknote ban sparks crisis in Yemen

Yemeni riyal banknotes are seen at the Central Bank of Yemen in Sanaa. The liquidity crisis has prompted exchange companies to freeze government salaries. (Reuters)
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Updated 20 January 2020
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Houthi banknote ban sparks crisis in Yemen

  • Locals are bracing for a spike in fuel prices, which occurs when riyal dives

AL-MUKALLA, Yemen: Prices of basic imported goods increased 10 percent in government-controlled areas of Yemen this weekend — a result of the Houthi ban on newly printed banknotes.

“Importers told us the increase is due to the fall of the Yemeni riyal against the dollar and the Saudi riyal,” Mohammed, a shop owner in Al-Mukalla told Arab News.

The Iran-backed Houthis issued a ban on the use of banknotes released by the Central Bank in Aden, saying the move is meant to stop inflation and the deterioration of the Yemeni riyal against hard currencies. The Houthis have vowed to confiscate new bills and punish traders who possess or use them.

When the Houthis issued the ban a month ago, the Yemeni riyal was trading at 600 against the dollar.

The riyal has since fallen in value to around 650, forcing local importers to increase the prices of goods, and demonstrating
how areas liberated from the Houthis are still vulnerable to their economic decisions.

Locals are also bracing for a spike in fuel prices, which usually occurs when the Yemeni riyal dives.

Since December, Houthi-controlled areas such as Sanaa and other heavily populated areas in northern Yemen have suffered from a severe credit crisis that has pushed locals to exchange new bills with scarce and damaged old ones, or converting them to the dollar or Saudi riyal.

The liquidity crisis has prompted local exchange companies to freeze government salaries, exacerbating suffering in a country that is experiencing the world’s worst humanitarian crisis, according to the UN. 

“My agency managed to get rid of new notes here and there. We now only accept Saudi riyals or old bills,” a young man who runs a travel agency in Sanaa told Arab News on condition of anonymity to protect his identity. 

“Traders who have a lot of new bills smuggle them inside goods to be delivered to government-controlled areas, where they’re exchanged for old banknotes.”

The dollar is traded at 580 Yemeni riyals in Houthi-controlled areas, lending weight to economists’ speculation that the decision could create two economies, derail business between liberated areas and those under Houthi control, and boost currency arbitrage on the black market. 

Another repercussion of the ban is the unprecedented level of smuggling of hard and local currency between north and south.

In Al-Mukalla, local exchange companies told Arab News on Sunday that big traders in Sanaa smuggle hard currencies into liberated areas, where they are sold at higher rates. 

“They buy the dollar at 580 in Sanaa and sell it here at 640,” said Abu Awadh, a worker at a local exchange company who used a nom de guerre because he is not authorized to speak to reporters. Demand for the dollar and the Saudi riyal has decreased for the first time in years, he added.

Despite an abundance of the dollar in the market, the Yemeni riyal continues to plunge. According to local traders, the reason is that currency dealers move dollars between liberated areas seeking higher rates. 

The internationally recognized government in Aden, which has condemned the ban, appears powerless against its repercussions.

The Economic Reforms Team, a group of economic experts, warned that the Houthi decision could cause humanitarian, economic, social and political consequences. It urged warring parties in Yemen not to use the economy as a weapon. 


Algeria facing growing calls to release French-Algerian author Boualem Sansal

Updated 5 sec ago
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Algeria facing growing calls to release French-Algerian author Boualem Sansal

“The detention without serious grounds of a writer of French nationality is unacceptable,” France’s Foreign Minister Jean-Noël Barrot said
The European Parliament discussed Algeria’s repression of freedom of speech on Wednesday and called for “his immediate and unconditional release”

PARIS: Politicians, writers and activists have called for the release of French-Algerian writer Boualem Sansal, whose arrest in Algeria is seen as the latest instance of the stifling of creative expression in the military-dominated North African country.
The 75-year-old author, who is an outspoken critic of Islamism and the Algerian regime, has not been heard from by friends, family or his French publisher since leaving Paris for Algiers earlier this month. He has not been seen near his home in his small town, Boumerdes, his neighbors told The Associated Press.
“The detention without serious grounds of a writer of French nationality is unacceptable,” France’s Foreign Minister Jean-Noël Barrot said on Wednesday.
He added Sansal’s work “does honor to both his countries and to the values we cherish.”
The European Parliament discussed Algeria’s repression of freedom of speech on Wednesday and called for “his immediate and unconditional release.”
Algerian authorities have not publicly announced charges against Sansal, but the APS state news service said he was arrested at the airport.
Though no longer censored, Sansal’s novels have in the past faced bans in Algeria. A professed admirer of French culture, his writings on Islam’s role in society, authoritarianism, freedom of expression and the civil war that ravaged Algeria throughout the 1990s have won him fans across the ideological spectrum in France, from far-right leader Marine Le Pen to President Emmanuel Macron, who attended his French naturalization ceremony in 2023.
But his work has provoked ire in Algeria, from both authorities and Islamists, who have issued death threats against him in the 1990s and afterward.
Though few garner such international attention, Sansal is among a long list of political prisoners incarcerated in Algeria, where the hopes of a protest movement that led to the ouster of the country’s then-82 year old president have been crushed under President Abdelmadjid Tebboune.
Human rights groups have decried the ongoing repression facing journalists, activists and writers. Amnesty International in September called it a “brutal crackdown on human rights including the rights to freedom of expression, peaceful assembly and association.”
Algerian authorities have in recent months disrupted a book fair in Bejaia and excluded prominent authors from the country’s largest book fair in Algeria has in recent months, including this year’s Goncourt Prize winner Kamel Daoud,
“This tragic news reflects an alarming reality in Algeria, where freedom of expression is no more than a memory in the face of repression, imprisonment and the surveillance of the entire society,” French-Algerian author Kamel Daoud wrote in an editorial signed by more than a dozen authors in Le Point this week.
Sansal has been a polarizing figure in Algeria for holding some pro-Israel views and for likening political Islam to Nazism and totalitarianism in his novels, including “The Oath of the Barbarians” and “2084: The End of the World.”
Despite the controversial subject matter, Sansal had never faced detention. His arrest comes as relations between France and Algeria face newfound strains. France in July backed Morocco’s sovereignty over the disputed Western Sahara, angering Algeria, which has long backed the independence Polisario Front and pushed for a referendum to determine the future of the coastal northwest African territory.
“A regime that thinks it has to stop its writers, whatever they think, is certainly a weak regime,” French-Algerian academic Ali Bensaad wrote in a statement posted on Facebook.

Iranian Revolutionary Guards officer killed in Syria, SNN reports

Updated 20 min 31 sec ago
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Iranian Revolutionary Guards officer killed in Syria, SNN reports

DUBAI: Iranian Revolutionary Guards Brig. Gen. Kioumars Pourhashemi was killed in the Syrian province of Aleppo by “terrorists” linked to Israel, Iran’s SNN news agency reported on Thursday without giving further details.
Rebels led by Islamist militant group Hayat Tahrir Al-Sham on Wednesday launched an incursion into a dozen towns and villages in northwest Aleppo province controlled by Syrian President Bashar Assad.


Israel-Hezbollah ceasefire unlikely to hold: UK ex-spy chief

Updated 27 min 54 sec ago
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Israel-Hezbollah ceasefire unlikely to hold: UK ex-spy chief

  • Richard Dearlove: Agreement suits both parties in ‘short to medium term’
  • Deal leaves Iran ‘exposed’ as its Lebanese ally is temporarily incapacitated

LONDON: The ceasefire deal struck this week between Israel and Hezbollah is unlikely to hold, a former head of MI6 has warned.

Richard Dearlove, who headed the British intelligence service from 1999 to 2004, told Sky News that the deal, which came into effect on Wednesday, is a “retreaded agreement from 2006.”

That initial deal was designed to keep Hezbollah away from the border region with Israel, overseen by the Lebanese military and the UN, but in effect it “did absolutely nothing,” he said.

This week’s deal suits both Israel and Hezbollah “in the short to medium term,” Dearlove said, adding: “The Israelis must know how much of the infrastructure of Hezbollah they’ve taken down … They haven’t taken it down completely, but maybe the Lebanese state can reassert some of its authority as the government of Lebanon and keep Hezbollah to an extent under control. We just have to wait and see what happens.”

He said the ceasefire deal will be a blow to Hezbollah’s backer Iran, leaving the latter “exposed” with one of its allies temporarily incapacitated.

But he warned that this could escalate into “direct” confrontation between Israel and Iran were the latter to launch another ballistic missile attack.


Israeli FM: ‘No justification’ for ICC to take steps against Israeli leaders

Updated 51 min 38 sec ago
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Israeli FM: ‘No justification’ for ICC to take steps against Israeli leaders

  • The foreign minister also said Israel would finish the war in Gaza when it “achieves its objectives”

PRAGUE: Israeli foreign minister Gideon Saar said on Thursday that the ICC had “no justification” for issuing arrests warrants for Israeli leaders, in a joint press conference with Czech Foreign Minister Jan Lipavsky.
Saar told Reuters Israel has appealed the decision and that it sets a dangerous precedent.
The foreign minister also said Israel would finish the war in Gaza when it “achieves its objectives” of returning hostages being held by Hamas in Gaza and ensuring the Iranian-backed group no longer controls the strip. Saar said Israel does not intend to control civilian life in Gaza and that he believes peace is “inevitable” but can’t be based on “illusions.”


Pope Francis set to visit Turkiye for Council of Nicaea anniversary in 2025

Updated 28 November 2024
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Pope Francis set to visit Turkiye for Council of Nicaea anniversary in 2025

  • The pope had already expressed in June the desire to go on the trip despite international travel becoming increasingly difficult for him

ROME: Pope Francis said on Thursday he planned to visit Turkiye’s Iznik next year for the anniversary of the first council of the Christian Church, Italian news agency ANSA reported.
The early centuries of Christianity were marked by debate about how Jesus could be both God and man, and the Church decided on the issue at the First Council of Nicaea in 325.
“During the Holy Year, we will also have the opportunity to celebrate the 1700th anniversary of the first great Ecumenical Council, that of Nicaea. I plan to go there,” the pontiff was quoted as saying at a theological committee event.
The city, now known as Iznik, is in western Anatolia, some 150km southeast of Istanbul.
The pope had already expressed in June the desire to go on the trip and the spiritual head of the world’s Orthodox Christians, Ecumenical Patriarch Bartholomew, had said the two men would celebrate the important recurrence together but no official confirmation had been made yet.
Despite international travel becoming increasingly difficult for him because of health issues, Francis, who will turn 88 on Dec. 17, completed in September a 12-day tour across Asia, the longest of his 11-year papacy.