Yemen: remittances suspended in government attempt to stem currency collapse

A government meeting in the temporary capital, Aden, with the Central Bank of Yemen, chaired by Prime Minister Maeen Abdul-Malik, today approved “a package of urgent measures to stop the decline of the national currency, in the wake of a further collapse of local currency exchange rates, which plunged in unofficial transactions to more than 1,300 riyals per dollar. “.

The official Yemeni news agency affirmed that these measures are placed “within the framework of the integration of fiscal and monetary policy, which leads to the control of exchange rates and its serious repercussions on the lives and lives of citizens”.

The meeting confirmed support for Central Bank procedures to suspend licenses to engage in foreign exchange business for a number of companies and institutions that are not engaged in the law governing foreign exchange business and Central Bank instructions, and to refer them to the judicial and security authorities.

It also approved the temporary suspension of transfers through internal financial networks, the follow-up on the ground by the Central Bank of Yemen to implement and assess the situation on an ongoing basis and work on the strict application of exchange company law, and what includes examination and audit procedures in financial transactions on a timely basis.

The meeting agreed to implement a package of parallel measures, including streamlining the import bill and regulating hard currency demand to cover basic import operations.

It has instructed ministries and competent authorities to strengthen procedures in ports to prevent foreign exchange smuggling operations, to take all legal measures in this regard and to limit the transfer of funds abroad according to a mechanism approved by the Central Bank, and assist commercial banks in complying with the standard of disclosure and compliance.

He also stressed the coordination of fiscal and monetary policy and the follow-up on exchange rate developments through a joint working group between the government and the central bank and by proposing possible solutions to work on, including an action plan to invest the Special Drawing Rights estimated at approximately $ 660 million, as well as recently opened accounts in banks. The foreign ministry aims to enhance the national currency and provide coverage in cash for the import of raw materials prime in order to stabilize the prices of materials prime Basic.

During the meeting, the Yemeni prime minister stressed that “the economic battle in these circumstances are no less important than the military battle to complete the restoration of the state and end the Iranian-backed Houthi coup, especially as it affects the lives and lives of citizens, and there is no room for complacency “, he said.

The Yemeni currency is seeing a decline record against foreign currencies, in amid a deep division in already deteriorating financial and monetary institutions, with a price difference between the areas controlled by the Houthis and the areas of legitimate government control.

The ban imposed by the Houthi militia on the circulation and possession of the new printed currency by the legitimate government in its control areas has caused severe damage to the national economy and fiat money.

The legitimate government claimed, in previously, that the militia’s decision to prevent the circulation of the new currency is part of the destructive policies it has pursued since the coup to target the national economy, corruption and currency speculation and undermine government efforts and monetary policies.

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