The Houthi militia is pumping more than 60 million "frozen dollars" into the banking market

English - الثلاثاء 24 يناير 2023 الساعة 04:17 م
Aden, NewsYemen, exclusive:

The frozen US dollar - dollars with broken serial numbers - is invading the Yemeni banking market in Sana'a and the northern governorates, under the cover and management of the Houthi militia, the Iranian arm in Yemen.

The price of the riyal against foreign currencies recorded gains, with slight movements, in the areas controlled by the Houthi militia, during the past two days, at 555 riyals to the dollar, and 145 to the Saudi riyal, on Monday / Tuesday night.

A source working in one of the departments of the Presidential Leadership Council, in the capital, Aden, told NewsYemen: "The Houthi militia flooded the banking market in Sana'a and other areas under its control, with frozen dollars, so that some banks trade these banknotes without knowing it.

He added that, according to the information he obtained, more than $60 million of frozen dollars entered the banking market in areas controlled by the Houthi militia during the past three months.

The frozen dollar is widely spread in Turkey, Jordan, Iraq, Libya, Syria and other countries, and it is sold through brokers, gangs or smuggling networks.

These funds are considered intact, but they are only frozen because they are serialized in numbers that are not included in banking operations.

The source confirmed that some foreign organizations and agencies operating in areas controlled by the Houthi militia played a major role in helping the Houthis by introducing frozen dollars and disposing of them in the banking market.

The source said that the Houthi militia introduced this money into companies, exchange shops and banks operating in Sana'a and their branches in the governorates under its control, and it is traded between citizens.

The concept of "frozen dollars" has emerged since the outbreak of the first Gulf War in the 1990s. It also left Libya's banks in 2011 and reached several countries in the region, even Asian countries where monetary control is weak.

The US monetary authorities, the Federal Reserve, freeze all cash balances looted from the central banks of the country in trouble;  So that they have no value, and the central banks of countries are informed of these dollars in order to freeze them, based on the serial numbers recorded in the databases of banks.

According to the source in the presidency, the Central Bank of Yemen - Aden receives reports from the Federal Reserve Board about these dollars and their serial numbers in order to freeze them.

For years, the Houthi militia has implemented procedures to pass the circulation of frozen dollars, by obliging banks to deal in white dollars, the pre-2009 edition, so that they can sell their stocks of frozen dollars.

And despite the assertion of financial experts, that the price of the dollar and the Saudi riyal against the local currency, the riyal, is unfair in the areas controlled by the Houthi militia, and that it is artificial and imaginary, by the Houthis curbing the demand for foreign exchange and directing it to the areas of the legitimate government.  However, information about the Houthis' use of frozen dollars answered many questions.

The source did not give data on the size of the monetary block of frozen dollars that entered the areas controlled by the Houthi militia during the past years.

Since moving the headquarters and operations of the Central Bank of Yemen to the capital, Aden, in December 2016, the Houthis have rejected this move and taken countermeasures, leading to the creation of two competing central bank entities in the country: one in Sanaa under the authority of the Houthi militia and the other in Aden under the government.

The Central Bank of Sana'a enjoys greater influence over the population and financial centers in the country, but without international recognition, and it is isolated from international banks and international financial institutions, and its channels of communication with foreign banks are closed.

While the Central Bank of Yemen - Aden enjoys international recognition, but has limited power at the national level, and faces difficulties in imposing its control over the market, banks and exchange companies in the liberated areas and areas of the Houthis.

According to a previous report by the World Bank, the Central Bank - Aden is unable to monitor the financing movement of banks, exchange shops and companies to ensure that they finance real economic activities and not speculation on the dollar.