Al-Shaibi stated to Sputnik that these measures involved restricting the activity of currency exchange institutions and prohibiting the sale of foreign currencies to traders or the public, limiting their sale to the central bank only. This allowed money changers to purchase foreign currencies from citizens at a fixed exchange rate of 425 for the Saudi riyal and 1617 for the dollar.
He continued, “In return, the central bank covers the cost of goods and services imported from abroad. A committee was established to organize and finance imports, chaired by the central bank governor, with members from the Ministry of Industry and Trade, the Chamber of Commerce, and the private sector. The committee has listed the goods allowed for import from abroad and allows traders to apply through banks.”
Al-Shaibi noted that these measures succeeded in withdrawing and suspending licenses from dozens of currency exchange establishments that were speculating in currency and violating laws, as well as closing a large number of them that did not have work licenses. More stringent regulatory measures were imposed, and import organization mechanisms were activated, mandating official imports, which reduced the gap between supply and demand imposed by speculative conditions.
Al-Shaibi mentioned that these measures by the central bank received support from the government and the presidential council, as well as from security agencies, enabling the central bank to implement them. He said, “These measures created a feeling among citizens that the riyal is starting to achieve relative stability and that policies are beginning to succeed, even if they do not feel an improvement in their daily lives at the same speed, due to the magnitude of the collapse and economic deterioration the country had reached.”
Economist Dr. Mohamed Jamal Al-Shaibi highlighted that the gains achieved are the result of implementing a set of administrative economic measures, which alone are not enough to create comprehensive or sustainable stability. They must be followed by more serious and effective measures, real measures such as resuming crude oil exports, providing sustainable public resources, as well as real support to the central bank’s treasury, either through foreign grants or direct cash deposits. Also, resuming the activity of Aden refineries at full capacity, providing crude oil for refining, and reducing the import of ready fuel from abroad, which causes foreign currency hemorrhage abroad.
He added, “Other more daring measures were also taken concerning corruption files and public fund looting. This will be achieved if the Supreme Committee for Sovereign Resources, headed by Major General Aidarous Al-Zubaidi, is enabled to do its work regarding controlling and supplying all public resources to the central bank’s coffers in the capital Aden, and stopping all accounts in commercial banks or currency exchange establishments.”
Al-Shaibi concluded his statements by saying, “It also requires continuing to reform public institutions and implementing governance, transparency, and combating corruption and money laundering to enhance external confidence in the central bank and the legitimate government and in the reforms they are undertaking, as well as gaining greater popular trust through the fair distribution of services and achieving justice in policy application.”
In recent weeks, many strict decisions and measures have been issued, which have had a significant impact on the dollar’s exchange rate against the riyal, reducing it by about half. Among these measures was the withdrawal of licenses from dozens of financial establishments and currency exchange companies.
Yemen has been experiencing a fragile calm since the United Nations announced on October 2, 2022, that the Yemeni government and the “Ansar Allah” group did not reach an agreement to extend and expand the six-month truce. Since September 2014, the “Ansar Allah” group has controlled most of the central and northern governorates of Yemen, including the capital, Sanaa. Meanwhile, an Arab coalition led by Saudi Arabia launched military operations on March 26, 2015, in support of the Yemeni army to regain those areas from the group’s grip.
The ongoing war in Yemen has claimed 377,000 lives by late 2021 and inflicted cumulative economic losses estimated at $126 billion, while 80% of the population, about 35 million people, are in need of humanitarian assistance, according to UN reports.
