The newly appointed Central Bank of Yemen (CBY) Governor, Ahmed Al Fadhli, said the upcoming strategy will rely on a number of main factors and that monetary policy will be decided in coordination with the country’s finance ministry.
Speaking on European aid, he told Asharq Al-Awsat: “We first want to emphasize to the donor countries in general that all the aid that comes to Yemen to finance projects, either directly or through affiliated organizations, must pass through the main banking system.”
He clarified that any money transferred outside the system, even if for relief purposes, fails in benefiting the Yemeni public and state.
He stressed that such practices have negative repercussions on the Yemeni economy.
Rather than channeling foreign currency funds into priority functions, they are redirected into other purposes. This causes the loss of the value of these funds and their positive return on Yemen.
As for the state budget deficit and the flow of foreign currencies through CBY, Fadhli explained that a comprehensive mechanism that benefits the whole national economy will be put in place.
“At this stage, we are looking into general indicators for what will be dealt with in the next stage, but with regard to the flow of foreign resources, there is great concern that it is restricted to main banking networks such as CBY and commercial banks,” he said.
With regard to the currency rate, Fadhli stated CBY will work to stabilize exchange rates.
Addressing the dilemma of counterfeit money entering the country and landing in the hands of Houthi militias, he remarked: “It is a top priority of the government to stop this and there will be mechanisms, as well as the activation of a department for combating money laundering and smuggling.”
He noted that CBY had also formed a department to trace and curb money laundering operations linked to the Houthis.