Aden, 10 December 2021 (TDI): The Yemeni currency has been collapsing rapidly since August 2021. In consequence, the population of liberated areas is the most affected. Under the control of the internationally recognized government, the rise in prices and the currency depreciation prevent Yemeni people from buying food and surviving in a civil war environment. Currently, the Yemeni rial is recording 1,700 to the United States dollar, nearly nine times higher than before the war.
Is Yemen in the path of economic collapse?
A warn-torn State like Yemen depends on the efficient work of the Central Bank and the allocation of sufficient donations. Both factors for Yemen mean “staying financially stable.” In this line, the ongoing civil war blocks the government’s efforts to stop the growing needs of the Yemeni population. Thus, the negative financial expectations due to the war, and the lack of funds to face the death of civilians and soldiers, open a cycle of endless insecurity.
For those reasons, the Central Bank of Aden has been printing new banknotes to cover the government’s deficit. However, this decision has fueled inflation, considering that the official Yemeni government and the Houthi militia have different banks with inconsistent monetary policies. Hence, as Yemeni economic analyst Abd al-Wahid told independent journalist Mohammed Yahya Gahlan, “the country urgently needs an independent and unified economic administration to manage the economy and the Central Bank through unified measures, without any current divisions”.
Central Banks New Board seems like a hopeful solution
After President Abdrabbuh Mansur Hadi reviewed the Yemeni Constitution and the Central Bank law on its structure and internal amendments, he signed Republican Decree No. 14. Based on the Yemeni Prime Minister’s proposal, the new positions will be the following professionals; Ahmed bin Ahmed Ghaleb Al-Maabqi as Governor of the Central Bank of Yemen and Muhammad Omar Banaja, Deputy Governor of the Central Bank. It is important to note that the decision was not arbitrary since the Yemeni president previously decided to assign the Central Agency for Control and Accountability to review the work of the Central Bank since 2016 when the transfer of functions occurred.
Regarding both decisions, Yemen’s Minister of Information, Culture and Tourism agreed with the initiative that “inaugurates a battle against corruption.” Therefore, “the measures taken will have a positive impact on the achievement of economic stability and will stop the manipulation of the currency”, he added.
Furthermore, the European Union welcomed the appointment to replace the central bank governor and deputy. The EU delegation in Yemen mentioned that the economic and monetary reforms reflect an already in an action plan communicated by Prime Minister Moeen Abdul-Malik in a leadership meeting with the governor of Aden.