Yemeni Central Bank Calls on Government to Review Fiscal Policies and Announces New Currency Auction
Yemen Monitor/ Newsroom
The Yemeni Central Bank announced on Tuesday a new auction to sell $50 million, scheduled for Sunday, October 20, coinciding with the continued collapse of the Yemeni rial to its highest level in history.
The terms of participation in the new auction stipulated that bids be submitted using the Refinitiv electronic platform. Banks that do not have access to the Refinitiv platform will be able to submit bids on their behalf upon a formal request submitted to the Central Bank via the dedicated email during the aforementioned auction period.
The announcement stipulated that the bid amount in the auction must be in multiples of one thousand dollars, and that the total bids submitted by each participant should not exceed 30% of the total value of the auction.
In a related development, the Board of Directors of the Yemeni Central Bank called on the Yemeni government today, Tuesday, to reconsider its fiscal and economic policies.
This came during a meeting to discuss a number of issues related to financial and economic developments, the state’s financial position and its obligations, and the congestion experienced by some governorates.
The meeting, chaired by Governor Ahmed Al-Maabqi, addressed the regional impacts and their repercussions on the stability of the fragile economic situation, the increasing pressure on the exchange rate of the national currency in light of the halt of the most important national resources, the decline in aid, and the significant decrease in state revenues and the increase in spending, especially energy spending, in the absence of scientific and practical treatments for imbalances.
The meeting reiterated its call on the government to reconsider its fiscal and economic policies, especially in the field of mobilizing and collecting public resources and re-planning spending according to priorities by adopting a realistic budget that specifies expenditures, resources, and deficits, and sources of financing that balance between self-resources and mandatory obligations and what can be mobilized from local and external resources to cover the financing gap.
The meeting also called on the Presidential Leadership Council and the government to support the Central Bank and assist it in carrying out its duties with independence and professionalism in the face of these difficult circumstances and unfavorable developments.
This comes as the Yemeni rial continues its decline in recent days, while the internationally recognized government has not commented on this ongoing collapse.
Money changers in Aden and Marib told Yemen Monitor yesterday, Monday, that the rial declined today to exceed the 2015 riyals mark against the sale of one US dollar, a first in its history.
In previous years, the rial had declined to this level, but the Yemeni government, supported by a deposit from Saudi Arabia and the UAE, intervened. The value of the Saudi riyal reached 515 riyals for sale.
Economic analysts expect the government’s inability to pay salaries to become apparent at the end of the month, with the continued collapse of the exchange rate over the coming days as the government has failed to cover the balance of payments deficit and in the absence of economic reforms.
