CBY-Aden

The first quarter of 2025 saw escalating US sanctions against the Houthis. The sanctions, intended to suffocate the Houthis financially, could have a negative impact on Yemen’s already fragile financial system, and threaten to disrupt flows of crucial humanitarian aid and remittances, further destabilizing the economy. In mid-January, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC)…

Yemen is experiencing a severe economic downturn as it tries to navigate long-term fiscal challenges. A World Bank report on Fiscal Vulnerabilities in Low-Income Countries released in late November highlighted Yemen’s dire fiscal situation as among the worst in the world. The World Bank’s Yemen Monitor for Spring 2024 noted that the current crisis is caused by plummeting oil and…

A political crisis has wracked the interim capital of Aden as the internationally recognized government struggles to deal with the plummeting Yemeni rial. The currency now trades at over YR2,000 to the dollar, having lost over a third of its value since the year began. Riven by political infighting and lacking the vision or tools to arrest the slide, an…

The ongoing economic conflict in Yemen escalated to include a fierce struggle between its bifurcated central bank for control over the nation's fractured monetary system and financial institutions. On June 26, the Central Bank of Yemen in Aden (CBY-Aden) issued a new directive, effectively banning banks and exchange outlets from working with unlicensed electronic payment companies. This move specifically targeted…

Yemen's microfinance sector is undergoing a radical transformation. Despite initial success in empowering small businesses, the ongoing conflict has exposed deep vulnerabilities. Competition between the fractured central banks has driven a surge in microfinance bank (MFB) licenses. While this promises to expand financial inclusion, it raises serious concerns about long-term sustainability and financial stability. Several other factors are driving the…

Threatened with new attacks, Saudi Arabia has forced the Yemeni government to abandon efforts to cut off the Houthi group (Ansar Allah) from the international banking system. Financial sanctions enacted by the government-aligned Central Bank of Yemen in Aden (CBY-Aden) were perhaps the government’s last card in its efforts to negotiate economic relief or affect the power imbalance ahead of…

The re-designation of the Houthis as a Specially Designated Global Terrorist group (SDGT) by the Biden administration, which took effect on February 16, has sparked a complex debate. The move follows a series of Houthi missile attacks on commercial vessels in the Red Sea and Bab al-Mandab Strait. The designation allows the US Treasury to impose sanctions on individuals and…

Since April 2022, the war in Yemen has mutated from a high-casualty conflict to a protracted stalemate with relatively stable frontlines. The contest is now over the economy, as the Houthi group (Ansar Allah) leverages negotiations and its military power to put fiscal pressure on the internationally recognized government. The current phase has been marked by the expansion of economic…