Yemeni Central Bank Prompts Fear After Halting Dealings with Five Commercial Banks
(Arab World Press) - The Central Bank of Yemen’s decision to bar currency exchange companies and agents from dealing with the top five commercial banks in the country has stirred confusion and fear among Yemeni citizens, merchants and investors alike.
Abdul Karim Raed, the owner of a commercial institution in Aden, described the decision as “scary”.
“As a trader or citizen, I become anxious when I look at the decision to halt dealings with major banks located in Taiz or in the rest of the governorates. It would have been more effective to arrest the money exchangers manipulating currency rates before penalizing the banks, because the banks are considered major investors, and they have strong capital. A merchant or citizen could lose confidence in these major banks, let alone money exchangers,” he said.
“As investors and depositors in some of these banks, we are worried about this decision, because it causes a major obstacle for us in dealing with these banks or with others,” Raed added.
The decision meant that Umm Mohammed, another Yemeni citizen, could not receive a Ramadan money transfer from her son, in Saudi Arabia.
“My son is an expatriate in Saudi Arabia. I wanted to buy Ramadan supplies, to provide breakfast supplies at home for Ramadan, but my son told me that he is having difficulty transferring the money to Yemen. I don’t know what the reason is, but we are in need, and face difficulty living like that,” she said.
The Central Bank in Aden attributed its decision to non-compliance on the part of the concerned banks with the bank’s restriction of money transfers to the unified network supervised by the Central Bank, and to the banks’ continued dealing with money transfer networks located in Yemeni areas controlled by the Houthi militias.
The decision spread fears of further deterioration in the value of the local currency, in addition to concern about its impact on investors and depositors in those banks, and the monthly remittances sent by expatriates to their families, who depend on them for their livelihood.
Financial analyst Wafik Saleh played down the effects of the Central Bank’s decision on financial remittances, stressing that the new policy would not be implemented to begin with.
“The Central Bank cannot besiege these banks, as they are among the largest commercial banks in the country, and constitute major financial arms for the Central Bank in Aden,” he said.
“I think what happened is just a warning to these banks to abandon the policy of dealing with the Houthi militias, and to implement the monetary policy issued by the Central Bank in Aden,” Saleh added.
Yemen’s economic situation has been dire since the beginning of the civil war nine years ago, which led to the division of the central banks in Sanaa and Aden, and the decline in the value of the national currency and the government’s foreign currency revenues.