Yemeni Officials, Experts Call for Using New Saudi Deposit for Economic Reform

Arab World

March 7th, 9:42am

Aden - Waddah Aljaleel

Workers and customers at the Central Bank of Yemen in Aden, Yemen December 13, 2018. REUTERS/Fawaz Salman

Yemenis are optimistic that a Saudi deposit in the Central Bank will contribute to economic recovery, stop the collapse of the local currency, and control prices, especially with the approach of the month of Ramadan. Saudi Arabia deposited $1 billion in the Central Bank of Yemen’s legitimate government, in a bid to bolster the economy. Yemeni economic researcher Abdel-Hamid al-Masajdi said that any new deposit or foreign exchange resources would contribute to improving the value of the local currency. In light of the challenges facing the government, this deposit will have a temporary impact on the value of the Yemeni currency, Masajdi told Asharq Al-Awsat, calling on the government to rely on its own resources, including revenues from oil and gas sales, and non-oil resources, such as tax, customs and fees collected centrally or through local authorities in the governorates, in addition to grants and subsidies. The Yemeni researcher pointed to the importance of developing a system to raise the efficiency of collecting these resources, in cooperation between the security and executive authorities. Saudi Arabia had previously deposited $2 billion dollars in 2018 to support the Yemeni currency. The Central Bank used most of the deposit to help finance the import of basic food commodities and fuel. For his part, the Governor of the Central Bank of Yemen, Ahmed Ghaleb, said that the Saudi deposit came at a very sensitive and important time, to contribute to strengthening monetary stability. However, he warned in previous television interviews that the deposit was not a solution to the disastrous economic situation in Yemen, especially after the government lost more than 70 percent of its revenue sources by stopping oil exports. Economic researchers and academics believe that the legitimate government can curb the role of the Houthi militia in Sanaa, which will encourage businessmen to move their investment centers from Sanaa to Aden and other liberated cities, thus improving the income flow. For his part, Mohammad Qahtan, a professor of economics at Taiz University, called for ending the division of the local currency and the banking system, and for the Central Bank in Aden to restore its sovereignty over the financial market.

from Asharq AL-awsat https://english.aawsat.com/home/article/4197631/yemeni-officials-experts-call-using-new-saudi-deposit-economic-reform