RIYADH, Feb 21 (Reuters) - Saudi Arabia will make a $1 billion deposit in Yemen's Aden-based central bank on Tuesday, a Saudi source told Reuters, as the government there struggles with a weak currency and high fuel and commodity prices.
An official announcement is expected later on Tuesday at the closing of a major humanitarian conference hosted by the kingdom's King Salman Humanitarian Aid and Relief Center in Riyadh, the source said.
Riyadh leads a military coalition in Yemen that has been fighting the Iran-aligned Houthis since 2015 after the movement ousted the Saudi-backed government from the capital, Sanaa.
The conflict has shifted to a no-war, no-peace stalemate as the fighting has largely stopped, but both parties have failed to renew a United Nations-brokered truce that expired in October.
It was not immediately clear whether the $1 billion was part of an existing $3 billion support package pledged last May by Saudi Arabia and the United Arab Emirates for Yemen's economy.
The internationally recognised government based in the south had seen its public finances worsen after the Houthi movement launched a series of attacks on terminals there that hampered oil exports, a key revenue source.
In November, the Arab Monetary Fund signed a $1 billion agreement to support Yemen's economic reform programme.
The conflict has killed tens of thousands of people and left 80% of the population reliant on aid, with millions hungry.
Last month, the Aden-based government raised the U.S. dollar exchange rate used to calculate customs duties on non-essential goods by 50% amid dollar shortages, sending prices to all-time highs.
On Tuesday, the rial was trading at 1,225 to the U.S. dollar on the black market in Aden, traders said.
Yemen has two rival central banks. The government has resorted to money-printing to finance the deficit, but in Houthi-held areas, where new notes are banned, the rate is around 600 rials to the dollar.
