The Central Bank of Aden does not oversee the exchange market
English - Saturday 19 September 2020 الساعة 03:46 pm
Aden, NewsYemen, Exclusive:
The riyal continued to decline in government-controlled areas, representing the lowest value ever, with the value of the dollar being 832 riyals in Aden, 828 riyals in Hadhramaut, and 610 riyals in Sana'a.
The cumulative increase in food prices in 2020 remains worrying, and inflation in the minimum cost of the food basket has already exceeded the crisis level criterion for 2018, by 15 percent, while purchasing power is gradually eroding.
And 58 percent of households with insufficient access to food cited unemployment and low wages as major shocks to them.
In its latest report, "The Latest Economic Developments in Yemen," the World Bank revealed that the Central Bank of Yemen - Aden has not yet completed the implementation of the network connection of transfer networks between it and all exchange shops and companies.
The World Bank added that the Central Bank of Aden cannot supervise the exchange market sector and inspect in real time the accounting systems, because networking is not implemented.
The World Bank report indicated that exchange companies did not comply with the instructions of the Central Bank, which issued circulars several times, to take legal measures, including canceling the license.
Money exchange shops and companies have come to dominate the economy and control the exchange rate, in light of the weak capabilities of the Central Bank of Yemen - Aden, which confirms that the hidden economy is prevalent in the country and is controlled in light of the weakness and fragility of government financial institutions.
Experts attributed the dominance of money changers over the banking sector to the weak economic influence of the state, low confidence in the capacity of the economic institutions run by the government and the Central Bank of Aden, specifically with regard to foreign exchange management, local currency reserves, the Yemeni riyal exchange rate, and the continued implementation of food and fuel import mechanisms.
Economists confirm that the Central Bank of Aden has failed over the past years to strengthen the supervision and control mechanisms for exchange shops and companies and to oblige them to obtain licenses and renew them regularly, to comply with the exchange law and the central bank law, and to link them automatically to the central bank.
They added that the central bank is unable to monitor the financing movement of banks, exchange shops and companies to ensure that they finance real economic activities and not speculate on the dollar.
Money exchange shops and companies have swelled in recent years, in light of the war economy, and their number was estimated at more than 1,700 offices and companies, of which 1,100 were without licenses, according to sources in the Central Bank of Yemen.
