Yemen: Central Bank Shuts 30 Exchange Firms Linked to Currency Crash

Yemen: Central Bank Shuts 30 Exchange Firms Linked to Currency Crash

In a letter sent on Tuesday to local exchange firms and government and private banks, the central bank asked local monetary firms to sever ties with the blacklisted firms and freeze their accounts. The letter accused the firms of failing to comply with central bank regulations and taking part in currency speculation that led to the decline of the riyal.

The banned firms were established over the last five years when Yemen's banking system fell apart amid the country's civil war.

In a bid to curb currency speculation and money laundering, the Aden-based central bank has banned an informal remittance system between local exchange firms known as Hawala, and replaced it with a formal electronic network under its supervision. It also closed many unauthorized exchange firms and provided locals goods and fuel traders with hard currency.

The measures had no effect on the market as the Yemeni riyal plunged to 880 against the dollar this week, reaching historical new lows and breaking a previous 855 record last month. The dollar was traded at 682 in January this year, falling from 215 in January 2015.

Local currency traders told Arab News that there is surging demand for the US dollar and Saudi riyal from local