Internationally recognised Yemeni government signed a deal with the Arab Monetary Fund on Sunday, paving the way for $1 billion in economic aid for the Saudi-backed government, state media said.

The Abu Dhabi-based fund, a sub-organisation of the 22-member Arab League, will disburse the $1 billion scheme from 2022 to 2025. The economic agreement aims to help the Yemeni government build monetary and fiscal stability through broad economic reforms, Saba news agency said.

Now in its eighth year, Yemen’s civil war has devastated the country’s economy and pushed half the population to the brink of famine. More than 150,000 people, including more than 14,500 civilians, were killed in the conflict. On average, food prices were 60% higher than last year, largely because the war in Ukraine cut off the country’s main wheat imports from Eastern Europe.

The conflict began in 2014 when Iran-backed Houthi rebels seized the capital Sanaa and much of northern Yemen, forcing the government into exile. A Saudi Arabia-led coalition, including the United Arab Emirates, intervened in 2015 to try to restore internationally recognised government authority. The country’s central bank has since been split between the warring parties.

The Aden branch of the Central Bank of Yemen has fallen under the control of the Saudi coalition forces. The Aden branch has fuelled inflation in recent years by printing new money to pay debts and public sector wages. The banknotes printed in Aden are no exception in Houthi-controlled areas, whose central bank operates in Sanaa.
On Sunday, the agreement was signed by Ahmed al-Maabqi, head of the Aden branch of the Central Bank of Yemen, in the presence of Saudi Arabia’s Finance Minister Mohammed Al-Jadaan.

The rebel group condemned the agreement in a statement issued by the Houthi finance ministry after the signing. It said the fund would only “serve the aggressor state, not Yemeni society”. The Saudis have spent billions of dollars supporting the internationally recognised Yemeni government over the years, and the kingdom had previously pledged $3 billion in April to help its war-torn economy.