Report urges the Yemeni government to dismiss the governor of the Central Bank and investigate his departments
English - Tuesday 13 April 2021 الساعة 04:50 pm
Hadramout, NewsYemen, Exclusive:
The research report urges the internationally recognized Yemeni government to dismiss the governor of the Central Bank of Yemen in the temporary capital of Aden and his entire board of directors, and to investigate the four bank governors, their deputies, and senior management officials who have held the position since the bank’s move from Sana'a in late 2016.
According to a report by the Economic Unit at the Sana'a Center for Studies, the investigation must include all members of the executive management for possible criminal violations.
The Sana'a Center report focused on the accusations that the United Nations team of experts made to the Central Bank of the latter's misappropriation of $ 423 million from the deposit provided by the Kingdom of Saudi Arabia to finance imports of basic commodities, which amounted to two billion dollars.
The Sana'a Center report said that the report of the Sanctions Committee expert team included serious errors in evidence and arguments, confirming that Yemenis do not benefit from the letters of credit system. This is because the prices of basic imports in the market did not decrease, but they got a relative respite from food price inflation during 2019.
The center said that the team of experts also erred in the basic data and calculations it used to determine the difference between the exchange rate offered by the bank and the average market exchange rate, citing a major misunderstanding of the bank's legal mandate.
The report stated that "given the erroneous assumptions on which the group of experts based its argument, its specific conclusions are incorrect."
The Sana'a Center report said that major imbalances took place in the bank, which led to dire consequences that affected the economy and caused the currency to collapse, stressing a comprehensive and independent audit through an investigation committee for all bank operations related to the Saudi deposit, and its sales and purchases of foreign exchange.
He stressed the need to initiate reform of the bank’s institutional structures and monetary policy to include accountability and transparency mechanisms.
Regarding efforts to stop the collapse of the local currency in front of foreign exchange, the report emphasized the need to adopt a unified floating exchange rate policy, and to cancel the current use of multiple exchange rates for internal accounting and financial transactions within the government.
"The new exchange rate policy must take into account the bank's currently weak foreign exchange stock and try to influence the supply and demand sides of the foreign exchange market indirectly through well-planned and well-studied interventions," he said.
According to the Sana'a Center report, the bank’s stock of foreign exchange has run out, and the value of the riyal is at its lowest level ever with the beginning of 2021.
He said that the weak currency has led to a rise in the prices of basic commodities and reduced the purchasing power of consumers, which means a decline in the ability to bear the costs of basic necessities of life for millions of Yemenis who depend on aid to survive.
He explained that the only solution to confront this trend in the short term is to provide new foreign exchange reserves to finance Yemen's imports.
He pointed out that this does not seem imminent, as "Saudi Arabia seems to be really reluctant to renew its financial support to the bank, and it will also be more reluctant after the accusations of the team of experts. Likewise, these accusations may impede Yemen's access to support from other potential donors."
The Sana'a Center report said that the detailed conclusions of the United Nations expert group about Hayel Saeed Anam trading group were inaccurate, but the existence of suspicions of corruption and monopoly of the group was accurate.
The team of experts said in its report that the group received $ 194.2 million in illegal funds from the Saudi deposit, which is nearly half of the total amount embezzled by the bank.
The report called on the group to publish all data related to its use of the letters of credit mechanism, specifically the detailed data of the prices of its commodities and the products that used goods imported through letters of credit, which were sold in Houthi-controlled areas and government-controlled areas.
He emphasized that an independent audit should be carried out for the group's use of the bank's import financing mechanism in Aden, and any other source of foreign exchange that intersects with it.
The report called on the UN Panel of Experts on Yemen to begin reviewing their annual report for the year 2020 to correct all the errors contained therein.
He emphasized reviewing the methodology by which the team reached the wrong numbers and conclusions, and making the necessary arrangements to avoid such errors in any future reports.
It also called for searching for and attracting Yemeni expertise to assist in collecting and evaluating information and data for their reports. The fact that the team of experts does not include any Yemeni, and clearly lacks informed knowledge, and sometimes basic knowledge of the local context.
