عملة سعودية

السابق التالى

Money changers keep the local currency, causing a liquidity crisis

English - Monday 18 April 2022 الساعة 12:03 am

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Aden, NewsYemen, special:

A banking source said that exchange companies and facilities in the capital, Aden, maintain large financial positions in the local currency, the riyal, in excess of their obligations, which has caused an undeclared liquidity crisis in the central bank and local banks.

The source confirmed to NewsYemen that the money changers have a monopoly on the local currency, and they are reluctant to supply it to the Central Bank, which pushed the foreign currencies, the dollar and the Saudi riyal, to decline.

He added, "The money changers are implementing a plan to withdraw the foreign exchange saved by citizens, and they have succeeded in spreading panic among the people who keep foreign exchange, which prompted them to sell their savings."

He explained that the recent return of foreign currencies is not due to monetary measures, stressing that the Yemeni banking market is responding very quickly to political developments and news circulating about the arrival of a Saudi-Emirati deposit to the Central Bank.

Exchange facilities and companies are still playing the role of banks in receiving citizens' deposits, despite the warning of the Central Bank of Yemen.

On February 27, the Central Bank of Yemen warned against keeping any accounts or balances under any names with exchange companies and facilities, stressing that the law grants it the confiscation or freezing of any amounts that may be deposited with exchange companies and facilities.

Since 2015, merchants and citizens have preferred to hoard their money in their stores and homes, or deposit it with exchange companies that keep the bulk of the money supply in their vaults.

During the past years, the exchange company robbed the most important tools of the Central Bank of Yemen by acquiring customer deposits in light of the weak confidence in local banks.

Since December 2021, the Central Bank of Yemen has been struggling to restore its validity, functions, and reputation, and to impose its control over banks and exchange companies in the liberated and Houthi areas.

The Central Bank also works to activate the laws that regulate its relationship with banks and exchange institutions, including the Central Bank Law, the Islamic and commercial banks and exchange law, and money laundering.