The Central Bank of Aden reduces the influence of exchange companies

English - الثلاثاء 31 يناير 2023 الساعة 04:59 م
Aden, NewsYemen, exclusive:

The Central Bank of Yemen, Aden, has banned all exchange companies and facilities operating in the country from transferring funds abroad to finance the import of merchants, in a move aimed at reducing the influence of exchange companies, restoring the role of local banks, and controlling cash in foreign currencies.

The central bank's move came after years of exchange offices and companies acquiring foreign remittances and import financing activities, instead of local banks that have receded their role due to the challenges left by the conflict on the banking sector.

Exchange offices and companies have spread remarkably, with an estimated number of more than 1,350 offices and companies, of which 800 are without licenses, in 2017 - the latest official statistic - compared to 606 in 2014.

According to the Central Bank's circular, only local banks are authorized to transfer funds to feed their accounts abroad and finance imports, which have points through the Swift system, which is controlled by the Central Bank.

Financial experts believe that the central bank's step is in the right direction, even if it came late, and would empower the official banking sector and restrict the activities of speculators in foreign currencies that have spread in light of the weak control over the activities of money changers.

In another step, the Central Bank of Aden issued a circular addressed to exchange companies and facilities operating in the country, obligating them to register and link with the unified network of funds.

According to the Central Bank’s circular, all exchange companies and facilities must expedite the process of registration and linking with the unified network of funds, and register agents in the money transfer system before the end of January 2023, stressing that fines will be imposed on those who are late.

The Unified Network of Funds is a Yemeni joint stock company, with a capital of five billion riyals, and its constituent assembly included 47 founders representing 47 exchange companies from the largest exchange companies in Yemen.

The unified network of remittances was established to unify the activities of the multiple networks in one channel, and to limit the use of the current remittance networks in harming the national economy.