Yemen government, Houthis reach deal on banking, airline operations De-escalating financial row

The Yemeni government and the Iran-backed Houthis have reached a pivotal agreement aimed at de-escalating their financial conflict.

Announced by the United Nations on July 23, the deal addresses the ongoing tit-for-tat banking sanctions that have plagued the country's financial sector, Caliber.Az reports via foreign media.

Since the Houthis' takeover of the capital, Sanaa, and other major population centres in early 2015, they have been in conflict with the Coalition to Restore Legitimacy in Yemen. This has led to a protracted struggle, with the internationally recognized Yemeni government retreating to Aden.

Despite a December commitment to a UN-led roadmap for peace, recent Houthi attacks on Red Sea shipping and subsequent retaliatory measures by the US and UK have stalled peace talks.

On Monday, both parties informed UN envoy Hans Grundberg of their agreement on several de-escalatory measures. The UN office highlighted Saudi Arabia's crucial role in facilitating this deal.

The agreement includes halting all recent banking sanctions imposed by both sides. Previously, the government-controlled central bank had banned transactions with six banks in Houthi-held Sanaa, accusing them of non-compliance with an order to relocate operations to Aden. In retaliation, the Houthis had prohibited transactions with 13 banks in Aden.

The deal will see the cancellation of these sanctions and a commitment to avoid future financial restrictions. Additionally, the Houthis and the Yemeni government will address administrative, technical, and financial issues related to Yemenia, the national airline, which had its funds frozen in Sanaa banks.

As part of the agreement, Yemenia will resume flights between Sanaa and Jordan and increase its daily operations. The airline will also start flights to Cairo and India as needed. The agreement aims to support a broader ceasefire and an inclusive political process, benefiting all Yemenis and fostering economic stability.