June 2, 2016 / 4:10 PM / 3 years ago

Yemen and central bank need support to avoid collapse - UN

GENEVA, June 2 (Reuters) - Yemen and its cash-strapped central bank need support from donors and international financial institutions to save the economy from collapse, the top U.N. official in the country said on Thursday.

A fragile ceasefire between the Iran-allied Houthis and the Saudi-backed Yemeni government to end the 15-month war has held in some areas in a bid to end the 15-month war that has crippled the economy and halted payment of many salaries, said Jamie McGoldrick, U.N. Humanitarian Coordinator for Yemen.

At least 13.6 million Yemenis require humanitarian assistance, with imports still restricted and many cargo ships unable to offload at ports, he said.

“Restrictions on importation, the banking sector, central bank, the systems that were in place before which were broken anyway are now completely exhausted,” McGoldrick told a news briefing in Geneva.

Food, fuel and medicines are in short supply, making prices “exhorbitant” and importers have trouble securing lines of credit to bring in goods, he said.

“The central bank is really struggling because they find it very difficult to get hard cash, to take the rials that are there and turn it into international currency.

“It has been very difficult for the central bank to operate the way it should,” McGoldrick said.

Referring to discussions among international financial institutions, he said there was a recognition that the economy and macroeconomic situation could not be be allowed to get any worse.

The United Nations has appealed for $1.8 billion in humanitarian aid for Yemen this year.

“The very sad news is that we’ve received 17 percent of that funded, this is now into six months of the year. It is a very unfortunate and very unacceptable situation,” McGoldrick said. (Reporting by Stephanie Nebehay; Editing by Richard Balmforth)

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