Saudi Arabia is to deposit $200 million in Yemen's Central Bank to help stem a slide in the value of the riyal that has caused food prices in the country to soar, AFP reported Tuesday (October 2nd).
King Salman "approved a request" from Yemeni President Abd Rabbu Mansour Hadi to provide the emergency credit, the official Saudi Press Agency reported late Monday.
The kingdom already deposited $2 billion in the central bank in January to try to shore up the riyal, which has lost more than two thirds of its value since March 2015.
The new deposit comes less than two weeks after the Central Bank, based in the government's temporary capital of Aden, raised interest rates on deposits to an all-time high of 27% after the riyal slid more than 36% since January.
The slide has seen a sharp rise in food and fuel prices that triggered protests across the government-held south in early September and prompted the government to raise public sector salaries by 30%.
The Yemeni riyal rose on news of the latest Saudi deposit, trading at just under 700 to the dollar on Tuesday against 820 the previous day.
The UN Office for the Co-ordination of Humanitarian Affairs warned last month that the currency depreciation was likely to make another 3.5 million Yemenis food insecure, in addition to 8.4 million people who already need emergency food assistance.