Economists: The deposit is a positive impetus for achieving stability and repairing imbalances
English - Saturday 25 February 2023 الساعة 08:36 am
Aden, NewsYemen, exclusive:
Local economists emphasized the importance of the deposit, which the Kingdom of Saudi Arabia announced to be placed in the account of the Central Bank of Yemen, in achieving relative stability in exchange rates, alleviating the scarcity of foreign exchange and fixing financial imbalances by providing the requirements of transparency and governance, which is the basis for achieving optimal utilization of the deposit.
And the Kingdom of Saudi Arabia announced, on Tuesday evening, the deposit of one billion dollars in the account of the Central Bank of Yemen to contribute to strengthening capacities in the field of implementing the economic reform program with the Arab Monetary Fund as a technical body.
The program aims to develop a clear road map and a vision that takes care of the Yemeni people first and addresses their needs, in addition to strengthening efforts to build reserves at the Central Bank of Yemen to enable it to enhance economic stability.
The head of the Center for Studies and Economic Media, Mustafa Nasr, said that it is assumed that the implementation of a program for financial and economic reforms that includes optimal use of the two Saudi and Emirati deposits, which are also unusable until now, is supposed to coincide with the uses of the Saudi deposit, considering the deposit as a positive step that will alleviate the scarcity of foreign exchange. It will enable the central bank to have more control over the exchange rate, that is, it will be used to support the bank's foreign exchange reserves.
He indicated, in a post on his Facebook account, that he had set many conditions to benefit from the deposit, and that the Central Bank and the Ministry of Finance confirmed earlier that they had met them since last June, explaining that the deposit came in light of the difficult economic situation facing the internationally recognized Yemeni government, as it The most important source of foreign exchange represented in the export of crude oil from the ports of Hadramout and Shabwa has stopped due to Houthi threats to strike oil ships.
Mustafa believes that the entry into force of the deposit will temporarily calm the deterioration of the Yemeni riyal and will enable the central bank to control the exchange rate in the event that the deposit procedures are carried out as expected, warning that the deposit that will be handed over to the central bank is not a free grant but rather a loan with interest.
Mustafa called on the Yemeni government and the Central Bank of Yemen to announce to the public opinion the nature of the structural and financial reforms and the principles of governance and transparency that they committed themselves to to the Arab Monetary Fund, Saudi Arabia and the UAE.
In turn, the economist Fares Al-Najjar indicated that the new deposit will be disbursed according to the conditions and requirements of transparency and governance to avoid the shortcomings of the previous deposit, and that it represents a positive impetus to enable the central bank to fulfill its obligations under its monetary policy to maintain relative stability in the exchange rate of the national currency.
He said, "Without a doubt, the deposit will contribute to creating a state of economic stability, reducing inflation, weakening purchasing power, and stabilizing basic commodity prices, but it will not completely solve the economy's problems in light of the limited resources and the suspension of the country's oil and gas exports."
In the opinion of a professor at the Faculty of Economics and Political Science at the University of Aden, d. Musaed Al-Qutibi, that the Central Bank is now facing a real challenge in activating its monetary policy tools and correcting their course; This was after receiving the Saudi deposit.
He stressed that this deposit will strengthen the bank's financial and monetary position and enable it to take serious and practical steps in correcting existing imbalances in the local money market, if there is a real will to do so.
