A tripartite banking initiative to address the challenges of the Yemeni banking sector

English - Thursday 20 October 2022 الساعة 04:31 pm
Aden, NewsYemen:

 The Yemeni actors in the banking and financial sector, participating in the Yemen International Forum 2022, put forward a vision that includes three initiatives to address the challenges facing the Yemeni banking sector and the economic repercussions resulting from them, according to the final report of the Yemen International Forum 2022.

According to the report, the tripartite initiative aimed at restoring the ability of the banking sector to facilitate foreign trade, reduce the costs of imported goods, support currency stability, reduce the disparity in the exchange rate of the old and new riyal editions, establish rules for currency unification, and address the liquidity crisis sweeping the country.

The Yemen International Forum was held from June 17-19, 2022 in the Swedish capital, Stockholm, and was organized by the Sana'a Center for Strategic Studies, in cooperation with the Folke Bernadotte Academy.

The report stated that the first initiative focused on preparing a national roadmap to improve Yemen's compliance with international standards for combating money laundering and terrorist financing, as this would help Yemeni banks restore their ability to facilitate foreign trade, which would reduce the cost of imported goods.

As for the second initiative, it aims to enhance technical coordination between the two branches of the Central Bank of Yemen in Aden and Sana'a regarding aspects such as: managing the supply and demand for foreign exchange reserves, especially when financing essential imports.

In addition to managing and monitoring the exchange sector, especially sharing data related to licensed exchange shops and companies, refraining from issuing any new licenses, reducing the current inflation in the monetary base and addressing issues related to the division of the national currency.

The third initiative focused on addressing the liquidity crisis in the banking sector, by releasing the foreign exchange balances of Yemeni commercial banks that have been frozen in the accounts of the Central Bank of Yemen since the beginning of the conflict.

Conference participants recommended the development of a comprehensive mechanism that ensures the involvement of the main parties and creates strong political support for the three-pronged banking initiative, with the aim of dealing with the central bank division, currency crisis, and liquidity problems.