ADEN, Yemen, July 23 -- Governor of the Central Bank of Yemen, Ahmed Ghaleb Al-Mabaqi, submitted on Tuesday his resignation to the country's Presidential Leadership Council (PLC), only to have it swiftly rejected, a government official told Xinhua.

The source, who spoke on condition of anonymity, said that the resignation of the central bank governor came amid ongoing tensions in the country's banking sector, and recent policy reversals by the country's PLC, following the reaching of a UN-brokered agreement between the Houthi group and the Yemeni government to ease economic restrictions in the war-ravaged country.

"Ghaleb's resignation was precipitated by the PLC's decision to rescind recent measures implemented by the Aden-based central bank, which had targeted commercial banks operating from Sanaa, the capital currently under Houthi control," the source said.

An unnamed official from the presidency office, quoted by the state-run Saba news agency, said, following the rejection, Ghaleb has reversed his decision to resign and will continue in his role with "full support of the PLC and the country's government to continue comprehensive banking reform efforts."

This incident highlighted the ongoing challenges in Yemen's financial sector.

Last month, the Central Bank of Yemen, operating from Aden under government control, suspended dealings with six major commercial banks, after they failed to relocate their headquarters from Sanaa to Aden and continued their operations with the Houthi group.

Adding to the complexity of the situation, the Houthi-controlled Central Bank in Sanaa recently issued a new 100-riyal coin, marking the first such action since the group took control of the capital and most of northern Yemen.

Earlier in the day, UN envoy to Yemen, Hans Grundberg, announced that the Yemeni government and the Houthi group have reached an agreement on several measures to de-escalate tensions in the banking sector. This agreement includes the cancellation of recent decisions against banks on both sides and a commitment to refrain from similar actions in the future.

Yemen has been embroiled in a devastating conflict since late 2014 when the Houthis seized control of the capital, Sanaa, and large swathes of the country. A UN-brokered truce in April 2022 led to a significant reduction in hostilities, but the country has continued to grapple with severe economic challenges and political divisions.

  - Xinhua