Yemen officials: Rebel ban on banknotes stops gov't salaries

Yemeni officials said on Tuesday that a powerful rebel group's ban on recently-printed government banknotes in areas under their control, including the capital, Sanaa, has held up the salaries of tens of thousands of civil servants and pensioners.

The officials and the internationally recognised government said the rebels, known as Houthis, refused to work with the Yemeni rials that its central bank had printed in the past three years.

The Iran-backed Houthis control most of the country's north, after more than five years of a stalemated civil war.

A Saudi-led coalition backs the internationally recognised government which still rules southern Yemen, including its interim capital, Aden, where its Central Bank is located.

The fighting in the Arab world's poorest country has killed over 100,000 people and left millions suffering from food and medical shortages. The conflict has also pushed the country to the brink of famine.

The finance ministry said the rebels' move paralyzed most banking activities in areas under Houthi control, depriving tens of thousands of people, including around 40,000 pensioners, of desperately needed payments this month.

Officials in Sanaa said the Houthis had given residents a month to hand over the newly printed but banned banknotes or face penalties that include jail.

The rebels said they would compensate them with old currency or an electronic rial they have created, they added.

The officials spoke on condition of anonymity because they were not authorized to brief the media.

They said banks and shops in Houthi-controlled areas have refused to use the banned banknotes.

Residents have resorted to trading in the Yemeni rial with the Saudi Arabian rial and the UN dollar before entering the Houthi-controlled areas to avoid being arrested, the officials said.