The Yemeni government’s Ministry of Finance in Aden confirmed on Monday that it has suspended civil servant salary payments in areas under Houthi control. 

The salary suspension, which affects retirees and employees in various sectors including health and education, is a response to the Houthis’ recent ban on newly minted currency issued by the Aden branch of the central bank. An official in the Aden-based government announced news of the suspension to Almasdar Online on Sunday. 

In a statement, the ministry said that it is "committed to disbursing salaries in areas controlled by the Houthis when the obstacles created by them are removed," threatening further consequences if the ban is not lifted.

The salaries of civil servants in areas under Houthi control, along with the pensions of about 40,000 people, had been suspended for years. The government resumed their disbursement about a year-and-half ago as part of a UN-backed agreement between the two banks over certain revenue arrangements. 

"Banks are unable to pay salaries to employees and retirees … creating a liquidity crisis," the statement said, accusing the Houthis of exacerbating the humanitarian crisis and ignoring the needs of the citizens under their control. The Houthis argue that the influx of Aden-printed currency will lead to hyperinflation.

The economic conflict is an extension of Yemen’s broader civil war that started when Houthi forces allied with former President Ali Abdullah Saleh seized control of the capital Sana’a and forced the resignation of President Abdrabbuh Mansour Hadi in early 2015. The Central Bank of Yemen split into rival branches the following year, after Hadi fled Sana'a and established Aden as Yemen’s interim capital.