Study: 51% of the total Yemeni money supply outside the banking system
English - Friday 14 May 2021 الساعة 05:00 pm
Aden, NewsYemen
A new economic study said that the money supply in the Yemeni market tended to increase, reaching 5 trillion and 814 billion riyals in 2019, compared to 3 trillion and 106 billion riyals in 2014.
The volume of cash circulation outside the banking system increased from 810 billion riyals in 2014 to 2 trillion and 962 billion riyals in 2019, accounting for 51% of the total money supply.
According to the study of economic developments in Yemen, the indicator of the percentage of the currency in circulation outside the banking system showed the weakness of the efficiency of the banking system and monetary policy, its low ability to mobilize financial resources from the public and the possibility of harnessing them for the benefit of development.
The Yemeni banking system consists of 17 banks, 4 of which are Islamic, and the banking market is characterized by concentration, as only 3 banks control more than 50% of the total assets and deposits of banks, which are the International Bank of Yemen, Al-Tadamun Islamic Bank and the Cooperative Agricultural Credit Bank.
While 5 banks own about 73% of the total bank branches in the country.
The relationship between the money supply and the money supply outside the banking system reflects the conditions of the institutional division of the central bank between the bank’s departments in Aden and Sana’a.
The annual changes in the money supply outside the banking system were higher than the changes in the money supply, as the average annual growth rate for cash circulating outside the banking system was 29.7% for the period 2015-2019.
