اصدارات المنتدى

Economic Bulletin-October 2020-Unification of CBY Policies: Opportunities and Obstacles to Success


Nov - 15 - 2020   تحميل الاصدار

Since the beginning of the war, the Central Bank of Yemen (CBY) has gone through two phases. The year 2015 was marked by a truce and a relative agreement by the parties to keep the CBY away from the ongoing conflict in light of its limited capabilities with the aim of preserving financial and economic stability, and giving priority to the people's interest. However, this reality did not last long, and signs of disagreement appeared soon. In mid-2016, interventions to steer financial and monetary policy to serve the interests of some parties emerged. Here the second phase began in conjunction with the imminent depletion of cash reserves, the liquidity crisis, the depreciation of the national currency, and the suspension of payment of public servants’ wages and salaries.
The Yemeni government decided to move the CBY headquarters to the provisional capital, Aden, abiding by its right to run the central CBY office, since it is the most important sovereign institution of the state in the midst of opposition by the Houthi group. Soon after, division came to the surface. Economic and financial activity deteriorated as a result of those repercussions and the negative impacts of the still ongoing war.
These divisions were reflected in the living standards and economic well-being of the people, in light of the suspension of salaries, wages and the most important sources of income for millions of Yemenis. They also led to the stagnation of commercial activity and paralysis of the financial and banking sector.
Hence, it is imperative for all parties to reconsider those unilateral measures.
In this file, we will address the opportunities and challenges for the parties to reach a unification of the monetary policy in a way that contributes to preserving the remainder of the economic and financial structure in the country, and to spare the people the scourge of those consequences. There are possible opportunities for success once all parties show goodwill and determination to overcome the challenges that will face this process.

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