Economist: The Yemeni economy is going through a critical stage... and this is the only way to a solution!
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The head of the Yemeni Accountants Syndicate and well-known economic expert, Muadh Al-Shuraihi, revealed a comprehensive roadmap to save the national currency from the continuous collapse it has been witnessing for years, amid an unprecedented monetary crisis exacerbated by the escalating political conflicts and institutional divisions between the two branches of the Central Bank in Sana'a and Aden. During a press statement, Al-Shuraihi said that the Yemeni economy is going through a critical stage manifested in the chaos prevailing in the foreign exchange markets, where the exchange rate of the US dollar reached more than 2,700 Yemeni riyals in the black market, while each banking entity is trying to impose an official price that does not align with reality, which has increased the complexity of the economic and humanitarian crisis and pushed the country to the brink of the abyss. He affirmed that "the monetary division between the Central Bank in Sana'a, which adopts a fixed exchange rate policy at the level of 536 riyals per dollar with strict control over transactions, and the bank in Aden, which adopts a free float policy that has led to the collapse of the currency and the exacerbation of speculation and corruption, is one of the most important reasons for the accelerating deterioration in the value of the Yemeni riyal." Roadmap Proposals for Currency Reform Al-Shuraihi pointed out the necessity of developing a comprehensive and integrated roadmap for monetary reform that includes a number of urgent and radical steps, which are: 1. Unifying the Local Currency Al-Shuraihi considered unifying the currency as an essential and indispensable step to restore economic stability, and suggested achieving this through three possible tracks: Canceling the old currency in circulation before 2016 and replacing it by opening bank accounts and depositing the old currencies within a specific time period. Stopping the use of new issues that were printed in Aden after 2016 without sufficient monetary coverage, and replacing them in a similar way. Canceling the 1,000 riyal denomination (before and after 2016) and replacing it with new currencies, with the aim of pushing citizens towards digital banking transactions instead of cash liquidity, within a strategy for financial inclusion and digital transformation. He pointed out that this procedure requires a large-scale awareness campaign to educate the community about the importance of banking transactions, reduce financial illiteracy, and restore confidence in the banking system. 2. Stopping the Floating Policy and Controlling the Exchange Market Al-Shuraihi called for the abolition of the free float policy that led to the riyal losing its value, and suggested fixing a realistic exchange rate for the dollar, supported by the Central Bank with real reserves from foreign transfers and investments, which would contribute to calming the market and reducing price fluctuations. 3. Combating Speculation Strongly He stressed the need to take strict measures against currency speculators, including: Freezing the accounts of suspects in banks. Preventing the import of dollars outside official channels. Establishing a special unit to monitor the movement of currency between regions and cities. Activating control and accountability mechanisms to monitor and prosecute those who manipulate the market. 4. Establishing a Central Platform for Buying and Selling Foreign Currencies Al-Shuraihi suggested establishing a central electronic platform managed by the approved regulatory authorities to be the only entity that supervises buying and selling operations in exchange shops, so as to ensure the provision of foreign currencies transparently and meet the needs of the official market. 5. Digital Transformation and Financial Inclusion Al-Shuraihi believes that digital transformation is the cornerstone of any sustainable monetary reform, and suggested: Generalizing the payment system via smartphones. Encouraging non-cash solutions in daily transactions. Expanding the network of ATMs. Exempting digital transfers from fees. Disbursing salaries and government aid through bank accounts. Collecting government revenues digitally. He explained that this step requires a plan of about 6 months to change the financial culture of citizens and accustom them to digital transactions. Conclusion: A Battle for Survival Between Only Two Options At the end of his speech, Al-Shuraihi warned that Yemen is now at a crossroads, facing only two options: Either implementing a radical reform plan that combines strict regulatory measures, as is the case in Sana'a, and transparency of management, as it should be in Aden. Or continuing to deteriorate towards the complete collapse of the currency, and the parallel collapse of the state. He stressed that time is running out quickly, and that the decision is now in the hands of the Central Bank and all relevant parties, pointing out that any delay in making decisive decisions means more suffering for citizens, and the loss of the last remaining economic stability.
