What is the point of the decisions of the Central Bank of Yemen in light of the monetary division and the collapse of the national currency?

Withdrawing the old currency, banning dealing with banks, a bone-breaking battle between the centers of Aden and the Houthi militia in Sanaa; After a two-month deadline passed without the banks responding, they moved their centers to the temporary capital (Aden).

The Central Bank issued decisions prohibiting dealing with the largest commercial banks in Sanaa, in addition to the decision to deposit old currencies in commercial banks located in areas of government influence.

The Houthi militia met the government escalation with another escalation, represented by the decision of the Central Bank in Sanaa to prevent dealing with thirteen banks located in areas under the influence of legitimacy.

The Houthi militia also called for replacing the old currency with the new one in exchange for compensating them with what it called the “real value.”

– Getting things back on track

Professor of Economics at the University of Taiz, Dr. Muhammad Qahtan, says: “I believe that the decisions taken by the Central Bank in Aden would bring things back to normal, due to the division taking place, and the Central Bank was supposed to be neutralized, as happens all over the world with internal wars.”

He added: “Sovereign institutions basically mean deviating from the conflict, but unfortunately what happened in Yemen is that the central bank did not deviate, and thus it had a significant impact on the national currency, and affected the economic aspect and the humanitarian situation.”

He continued: “Therefore, I believe that the Central Bank of Yemen in Aden has now begun to take decisions – in my opinion – that will contribute to reform.”

He added: “In fact, this decision was supposed to be made in 2016, but unfortunately when the legitimate authority in Aden decided to transfer the central bank, or more correctly the central bank’s sovereign functions, from Sana’a to Aden, no other decisions were taken to support this decision.”

He stressed that “the bank’s recent decisions will put things back on track, because if the chaos in the banking system continues, the Central Bank in Aden will not be able to implement monetary policies. It is the internationally recognized central bank and bears the responsibility of confronting economic fluctuations.”

He said: “The Aden Central Bank is the one who bears the responsibility of maintaining the exchange rate, and not deteriorating in the way it is happening, and thus the economic situation deteriorates, inflation occurs, and depression occurs, and it stands by and watches, while the banking system is uncontrolled and outside its control, so it was very important The central bank controls the banking system.”

He pointed out, “If the central bank takes control of the banking system, this means that it will be able to take monetary policies that will confront economic fluctuations, and thus improve the currently collapsed situation.”

– A Houthi point of view

The economic expert loyal to the Houthi militia, Rashid Al-Haddad, says: “The decisions of the Central Bank affiliated with the Houthis in Sana’a came to confirm that Sana’a is the primary market for the Republic of Yemen, especially since all the banks that were established, or were established, in areas outside Sana’a’s control, or within the framework of Sana’a’s control.” The other parties have very large relationships with the local market in the governorates under the control of the Sana’a authority.”

He added: “This measure was based on a number of justifications, including the failure of these banks to obtain official licenses and their failure to comply with the law.”

He explained: “The Central Bank in Sana’a imposes the law on the banking sector, and you know that there are dozens of banks, as well as exchange companies, and the close connection between the banking sector and the local market is very great.”

He continued: “Most of the imports, which arrived through the port of Hodeidah or arrived in Sana’a, were imported by southern merchants and businessmen, and there is already a large financial movement between these governorates.”

He added: “No matter how much attempts are made to deepen the monetary and financial division, Yemen is still united, and commercial dealings are still ongoing between the various governorates, despite the presence of great complications to this economic escalation, which Yemen does not need and is not in its interest, especially in the current circumstance.”

He added: “What happened is that Sanaa adopted the currency from the old edition, and was able to impose it at a price of five hundred and thirty riyals, while Aden failed to maintain the currency exchange rate.”

He said: “I here confirm that if Aden had been able to maintain the exchange rate of the national currency, the division would not have occurred in the first place.”

He added: “The division is the result of the major inflationary impact resulting from the tendency of the monetary authorities in Aden to print a huge mass of money, an inflationary issuance that has caused catastrophic repercussions on economic and living stability, as well as on the purchasing value of the national currency’s exchange rate.”

He explained: “The Bank of Aden took many arguments, but at the same time we say to it, if this bank was able to impose a monetary policy and provide a real model, being an internationally recognized bank, especially since there were oil exports for several years, and it obtained many foreign financing, Including Saudi deposits, grants, and others. The recognized government should rather have dealt with the economic file and managed the economic file wisely.”

-What is the value of the Sanaa central decision?

Economist Fares Al-Najjar says: “The decision issued by the so-called Central Bank in Sana’a is a decision – unfortunately – the value of the paper is more expensive than it, and it talks about stopping dealing with banks that do not even have branches within the usurped capital, Sana’a.”

He added: “On the other hand, I am surprised today that the Sanaa regime is crying over the banking sector, which for years imposed taxes, and led to a decrease in the size of the private sector within the subject areas – according to a World Bank report – by 50%.”

He continued: “I am surprised at how the Sana’a regime is crying today over the banking sector, which has plundered commercial banks’ investments in treasury bills and local debt instruments, amounting to four billion and six hundred million dollars, and deprived commercial banks of access to them, which has made the banks unable to pay. its obligations towards the depositor.

He added: “I am surprised at how the Sana’a regime is crying today over the banking sector, when it is the one that imposes taxes, and it is the one that created more than one thousand one hundred and twelve (1112) companies with one hundred and seventy-five (175) exchange companies, and allowed them to open accounts in violation of the Central Bank law?” .

He asked sarcastically: “What nonsense are the brothers in Sanaa talking about today, that the Central Bank in Sanaa today is careful? Where is this concern about systematic plundering?”

He added: “The Houthi militias stormed the Tadhamon Bank and stole the money under the pretext that it was money deposited by former President Abd Rabbuh Mansour Hadi. This is a militia group that does not think about a banking sector and does not care that there is a banking sector in the country.”

He continued: “The Central Bank in Aden today is very keen to restore prestige to the banking sector, and to address the distortions initiated by the Houthi group today.”

He added: “It is not logically or rationally possible for major centers to manage their compliance and manage their operations to remain operating under the authority of the coup in the shadow of a group classified as terrorist that is not subject to local or international oversight.”

He asked: “How will terrorist financing and money laundering be combated under an authority that is already classified as a terrorist at the global level?”

He added: “I think today, when we have reached a stage, there have been demonstrations, for days, in the usurped capital, Sana’a, of people in front of banks who could not get their money. Who bears this responsibility today? Who deprived commercial banks of access to their investments?”

He believes that “it is logical today for the Central Bank in Aden to try to protect the banking sector.”

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