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Yemen c.bank says it's ready to supply banks with foreign currency

DUBAI, April 23 (Reuters) - Yemen's central bank said it is ready to supply commercial and Islamic banks with foreign currency to finance imports of goods into the country, which has been pushed to the brink of famine by a four-year war, a Yemeni news agency reported.

The central bank has split into two rival head offices, reflecting the war between the Saudi-backed government and the Iran-aligned Houthi movement, creating hold-ups and payment problems that have exacerbated an urgent humanitarian crisis.

The branch in the southern port of Aden, the seat of the internationally recognized government, issued a circular saying it was ready to sell banks foreign currency at a rate of 506 rials to the U.S. dollar or at market rates, "whichever is lower," state news agency Saba reported late on Monday.

It cited the statement as saying this would cover letters of credit and financing guarantees for imports of goods not covered by a $2 billion grant from Saudi Arabia to help finance imports of basic goods and petroleum products.

The United Nations says about 80 percent of the 30 million population needs some form of humanitarian assistance and two-thirds of all districts in Yemen are in a "pre-famine" state.

The rival central bank headquartered in Sanaa, the capital now held by the Houthis who control most urban centers in Yemen, did not receive any funds from the Saudi loan. An official in the Sanaa branch told Reuters last year that traders must get letters of credit in Aden.

The war pits the Houthi group against a Saudi-led coalition trying to restore the government of Abd-Rabbu Mansour Hadi which was ousted from power in Sanaa in late 2014. The Houthis say their revolution is against corruption.

The conflict has devastated the economy of the poorest Arabian Peninsula nation. It has cut supply routes, reduced imports and caused severe inflation. The central bank nearly doubled its interest rate late last year to stabilize the currency. (Reporting by Nayera Abdallah in Cairo; Writing By Ghaida Ghantous, Editing by William Maclean)