Corruption overthrew four central bank governors

English - Tuesday 07 December 2021 الساعة 03:46 pm
Aden, NewsYemen, Exclusive:

Republican Decree No. (14) of 2021 was issued regarding the restructuring of the Board of Directors of the Central Bank of Yemen, appointing Ahmed bin Ahmed Ghaleb Al-Maabqi as governor of the Central Bank of Yemen, the fifth governor of the bank in 5 years.

Since transferring the operations of the Central Bank of Yemen to Aden on September 16, 2016, four former leaders have been changed on accusations of corruption and their failure to manage monetary policy, but this time the change includes the entire leadership of the Central Bank.

The decision to appoint a new governor for the Central Bank of Aden came, and the bank is experiencing its worst phase of weakness after losing all its capabilities and reputation, and its failure to control the riyal, and enabling exchange companies to control the money market, and its reputation stuck to corruption.

The Kingdom of Saudi Arabia refrained from supporting Yemen with a deposit to support the riyal, due to its dissatisfaction with the government’s performance with the last deposit and its failure to activate the economy, and stipulated changing the leadership of the Central Bank, but the presidency stuck to it for years before changing it yesterday, under pressure from citizens’ protests in a number of governorates.

Saudi Arabia had provided financial support to the Yemeni economy, amounting to more than $2.2 billion in March 2018, and subsidizing electricity fuel by about $180 million, which was crucial in helping Yemen escape from economic collapse.

The riyal has fallen rapidly since March 2020, after its stability in 2019, due to the Saudi deposit.

In a previous report, the World Bank revealed that the Central Bank of Yemen - Aden, has not yet completed the implementation of the networking of the transfer networks between it and all exchange shops and companies.

He added that the Central Bank cannot supervise the exchange market sector and inspect in real time on accounting systems, due to the lack of implementation of networking.

The World Bank report indicated that the 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.

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.

Malians attributed the dominance of money changers in the banking sector to the weak influence of the Central Bank, specifically with regard to managing foreign exchange, local currency reserves and the riyal exchange rate.

Economists assert that the Central Bank of Aden has failed over the past years to strengthen the mechanisms of supervision and control over money exchange shops and companies, obliging them to obtain and renew licenses regularly, comply with the exchange law and the Central Bank law, and automatically link them to the Central Bank.

They added, the Central Bank is unable to monitor the movement of financing for banks, exchange shops and companies to ensure that they are financing real economic activities and not speculating on the dollar.

Exchange shops and companies have swelled in recent years, in light of the war economy, and their number is estimated at more than 1,700 offices and companies, of which 1,100 are without licenses, according to sources in the Central Bank of Yemen.

Financial experts believe that the leadership of the Central Bank of Yemen in New Aden faces a difficult task, the first of which is to restore the reputation and prestige of the Central Bank, and to impose its control over banks and exchange companies in the liberated and Houthi areas.

In addition to activating the laws that regulate the central bank’s relationship with banks and exchange institutions, including the Central Bank Law, the Islamic and commercial banks and exchange law, and money laundering.

 The report of the United Nations Panel of Experts on Monitoring Sanctions in Yemen said that the Central Bank of Yemen violated foreign exchange rules, manipulated the foreign exchange market and “laundered a large part of the Saudi deposit into a sophisticated money laundering scheme.”

Reports confirm that the Central Agency for Control and Accountability, and a committee appointed by the House of Representatives, failed to enter the bank to review its operations, due to the refusal of the Central Bank leaders to allow them to carry out the tasks assigned to them.