In The Media

Yemen Central Bank Governor Warns of Upcoming Crisis

National Yemen
Yemen-central-Bank
Written by NY Staff

Aden- Yemeni Central Bank Governor Mohammed Awad bin Hammam has warned that if five billion dollars stacked outside the bank were not returned to the institution, then the problem of lack of liquidity would not be solved.

During an interview with Reuters, Hammam warned the crisis would turn into chaos for the bank’s failure to pay the five-million-worth of salaries for over 1 million and 250 thousand employees.

He explained that the bank was facing several problems including lack of income and halt of production and export of oil.

The governor also said that the bank had to pay for imports of sugar, rice, and wheat.

Hammam said that during his visit to Washington, he spoke with donors and the International Monetary Fund (IMF) to help the Central Bank because it is difficult for the bank to pay for imports.

According to Hammam, all economic activities in the country had stopped as a result of the war.

As for the liquidity problem, Hammam said that it was heightened in 2016, with money leaving the bank and never returning after having to pay salaries and cover other expanses.

The governor said that the bank requested the print of additional bills and awaits the approval of the government. He added that if the government approved it, then the liquidity problem would be solved and it would be easier to pay salaries.

If the government refused the request, then this would add to the growing problems that Yemeni citizens face.

He explained that the bank is paying to all citizens without any exception and without discrimination.

Hammam confirmed that Houthis take up to 100 million dollars to pay for members of the military institution, which they say are for war expenses.

The governor called citizens to take their money outside the bank system and deposit at the central bank to help with the liquidity problem.

A recent government report revealed that the severe liquidity problem is due to the increased bank withdrawals and money stored outside the bank system.

Monthly report of the Planning and International Cooperation Ministry revealed that the cash-on hand increased from 103 million dollars in 2014 to 884 million in 2015.

Original Article