Yemen southern forces claim seizure of billions in cash to 'stop terror financing’

Hind Al Soulia - Riyadh - Southern transitional forces in Yemen have seized billions of Yemeni riyals from a high-security government convoy in the latest escalation in the current fighting between the two long-time allies.

The Yemeni government said that armed men from the Southern Transitional Council (STC) intercepted the cash convoy transferring 65 billion riyals (Dh954 million) as it left the port for the headquarters of the Yemeni Central Bank in Aden on Saturday. They took the cash to a military base located between the districts of Al Mualla and Khourmaksar in Aden.

"The STC militiamen seized containers of newly printed banknotes, which was recently printed in Russia," a government source told The National.

The STC, a major contingent in the pro-government forces battling the Iran-backed Houthi rebels, said they took the money to try and prevent it being used by some elements in the government to fund extremist elements and also to try and halt a devaluation of the national currency.

"We transferred the money containers to a safe place to prevent further collapse in the national currency that will worsen the deteriorating condition of life of our people and as part of measures to prevent the rapid decline in the value of the riyal against the foreign currencies," STC spokesman Nazar Haiytham told The National.

"Such a step was taken also to dry up the sources of corruption and stop the use of the public money in funding terrorism," Mr Haiytham said.

A rift opened between the STC and the government last August when the southerners accused elements in the cabinet tied to the Muslim Brotherhood for undermining security and allowing Al Qaeda attacks on their soldiers among other issues. A transition deal brokered by Saudi Arabia in Riyadh was intended to usher in a new power-sharing arrangement but there have been delays in implementation, leading to the latest round of fighting.

Majid Al Daeri, an economic analyst based in Aden, said the STC's move would affect the government's ability to pay the salaries of state employees because the money seized was its last batch of banknotes printed in Russia recently.

“Also, such an act gives the government grounds to move the headquarters of the bank to Hadramawt or any other province under its control. This will deal a big blow to Aden which will lose the opportunity of being the centre of international banking transactions,” Mr Al Daeri told The National.

The Yemeni riyal has declined sharply against since early June from about 680 riyals to the US dollar to 750 on Saturday, according to rates provided by Al Omgy exchange centre.

Most of the exchange companies in Aden stayed shut on Sunday and Monday after the the currency's slide. A few small shops conducting exchanges on the black market were quoting the dollar at 750 riyals on Monday.