Yemen Central Bank Rules Out Exchange Rate Changes Without Economic Justification

The Governor of the Central Bank of Yemen (CBY), Ahmed Ghaleb Al-Maabqi, confirmed that any adjustments to the official exchange rate will only occur if warranted by demonstrable economic data and in service of the public interest, while dismissing circulating rumors regarding imminent rate shifts.

Al-Maabqi held an extensive meeting on Tuesday at the bank's headquarters in the interim capital, Aden, gathering leaders from Islamic, commercial, and microfinance banks, both in person and virtually. The primary focus was on recent developments in the foreign exchange market and monetary policies aimed at bolstering financial stability.

Discussions centered on the latest movements in foreign currency exchange rates against the national currency, set against what the bank termed a scarcity of local currency supply relative to heightened public demand. The Governor characterized this dynamic as a positive indicator reflecting growing confidence in the CBY's prudential policies designed to stabilize both the exchange rate and overall price levels.

During the session, the Central Bank reviewed the measures implemented to address current challenges, emphasizing the pivotal role commercial banks play in the success of these interventions. Further steps to enhance the efficacy of monetary policy and solidify monetary and banking stability were also explored.

Al-Maabqi stressed that the CBY remains committed to adopting "realistic and market-aligned" precautionary policies, balancing its obligations to citizens, financial institutions, and international partners. He reiterated that maintaining exchange rate stability is the paramount objective, explicitly refuting speculative reports concerning rate manipulation.

In a related development, the Governor convened a separate meeting with the Money Changers Association and major exchange companies. This discussion emphasized the critical need for strict adherence to regulations governing currency buying and selling operations, promoting transparency and discipline in the market, and actively countering any practices detrimental to monetary stability.

Participants across both meetings agreed to maintain continuous coordination and enhanced cooperation to effectively implement the Central Bank's policies and directives, ensuring the protection of the banking system and support for market stability.