Yemen chooses new Central Bank governor amid economic crisis

Move comes as the country faces its worst financial crunch since the conflict began in 2015

Abdrabbuh Mansour Hadi Mansour, President of the Republic of Yemen, addresses the 72nd United Nations General Assembly at U.N. headquarters in New York, U.S., September 21, 2017. REUTERS/Lucas Jackson

Yemen's President Abdrabu Mansur Hadi has reshuffled the administrative board of his country's Central Bank and appointed a new governor.

Mr Hadi issued a decree on Monday to confirm the changes after talks with the leadership of the Southern Transitional Council, state-run Saba news agency reported.

Ahmad Al Mabaki, 65, was appointed as new governor and chairman of the Central Bank of Yemen's board.

Economist and professor Mohammed Banajah was appointed deputy governor and vice chairman of the board, which has three other new members.

The move by Mr Hadi comes in line with Al Riyadh Agreement brokered by Saudi Arabia between his government and the Southern Transitional Council in November 2019 to end a year-long standoff between the two allies.

It comes as the war-ravaged country faces its worst economic and humanitarian crisis since the conflict began in 2015.

The Yemeni rial has significantly lost ground against foreign currencies, reaching new lows this week. On Monday, one US dollar was trading at 1,650 rials, according to exchange companies in Aden, compared with 215 before 2015.

The devaluation of the local currency has left millions of Yemenis starving as the majority of the population can no longer afford basic commodities, with foreign currency reserves at the Central Bank almost exhausted.

Yemeni economic analysts are optimistic about the new administration.

Majid Al Daeri, an economic analyst based in Aden, told The National that Mr Mabaki's appointment as governor was one of the best decisions Mr Hadi had taken.

'Cash-injection needed'

“The newly appointed governor is known for his long experience in the economic field. He is widely known as a banking specialist, so I am optimistic about him. He might be able to come up with urgent solutions to stop the unprecedented collapse of the local currency,” Mr Al Daeri said.

“For him to succeed, the new governor must be fully supported by the coalition and the international donors. An urgent new cash injection is a must at this critical time to help the new administration of the bank to form new reserves of foreign currency and re-control the banking market.”

However, other economists said the appointment of a new board would not help to stop the local currency's slide unless bold banking policy reforms are introduced by the Yemeni government.

“The new administration will not be able to do anything to stop the unprecedented devaluation in the local currency unless the government implements enduring economic solutions, revives the oil exports and deposits all state revenue in the Central Bank,” economist Shalal Afif, a Yemeni, told The National.

Updated: December 7th 2021, 9:39 AM