Yemen’s banks deteriorate as the economy collapses

Fears of economic collapse are causing Yemeni citizens to withdraw their US dollar savings from banks and keep the dollars at home. Yemen is facing economic collapse for several reasons:

  • The political chaos of the country having two capitals after the Houthi seizure of Sanaa is preventing many businesses from operating.
  • The fighting has reduced oil exports, Yemen’s main source of dollars. At the same time the price of oil has been falling, so even less money is coming in.
  • Saudi Arabia used to provide aid to the Sunni-led government of Abd-Rabbu Mansour Hadi, but that aid was cut off when the new Shia-led Houthi government took over.

It is possible that the Sanaa government will soon be unable to pay salaries within a few weeks. The economic collapse represents a recruiting opportunity for Al-Qaeda in the Arabian Peninsula .(AQAP). Widespread protests and riots, as well as terrorist acts by AQAP, are expected to increase