The Governor of Yemen's Central Bank, Ahmed al-Mabaqi has resigned, citing the government's reversal of recent bank decisions aimed at regulating the banking sector and overseeing banks. The resignation was confirmed on Tuesday, July 23, 2024, by local sources.

Al-Mabaqi submitted his resignation to the Presidential Leadership Council in a letter obtained by "Barran Press", expressing his inability to continue as governor following the council's decision to overturn the bank's recent measures. In his resignation letter, he thanked the council for their support during his tenure, highlighting the bank's achievements in implementing monetary policies, particularly in avoiding inflationary financing to cover the government's growing expenses and deficit.

He also acknowledged the council's decision to address the exceptional situation created by the Houthi militia, emphasizing the council's authority in matters of war, peace, and national interest.

The resignation comes on the heels of an agreement reached between the internationally recognized Yemeni government and the Houthi militia, facilitated by the UN Special Envoy for Yemen, Hans Grundberg. The agreement includes measures to de-escalate tensions in the banking sector and Yemeni Airways.

The agreement, according to the UN envoy's office, involves the cancellation of recent decisions and actions against banks by both sides, a commitment to refrain from future similar measures, and the resumption of Yemeni Airways flights between Sana'a and Jordan, with an increase to three flights daily. The agreement also includes plans for flights to Cairo and India, as well as meetings to address administrative, technical, and financial challenges faced by the airline.

The Yemeni government welcomed the agreement, citing humanitarian concerns and the need for flexibility in implementing economic and banking reforms. The government also acknowledged the role of the international community in mediating the agreement.

Al-Mabaqi had previously resisted pressure to reverse the bank's decisions, threatening to resign if the government did not uphold them. His resignation marks a significant setback for the bank's efforts to stabilize the Yemeni economy and address the challenges posed by the Houthi militia.

In May, the Central Bank issued a decision to suspend the operations of six Yemeni banks, following a 60-day deadline for them to relocate their headquarters to Aden. The bank also issued a directive for individuals, businesses, and financial institutions to deposit old banknotes issued before 2016 within 60 days.

The Central Bank's actions were aimed at countering the Houthi militia's economic measures, which had negatively impacted the Yemeni economy and led to a decline in the value of the Yemeni rial in government-controlled areas. The bank faced international pressure to reverse its decisions, which sparked public outrage in Yemen as it was perceived as a bailout for the Houthi militia.

The Governor's resignation and the government's reversal of the bank's decisions raise concerns about the future of economic reforms in Yemen and the ability of the government to effectively address the challenges posed by the ongoing conflict.