Yemeni expert affirms new banknotes will not affect macroeconomic dynamics, inflation

SANAA, July 16 (YPA) – Yemeni economic expert Rashid Al-Haddad explained that printing of 200-riyal banknotes by Sanaa-based Central Bank of Yemen would not lead to inflation or depreciation in the currency’s value.

Al-Haddad affirmed that the move was a replacement of damaged 200-riyal banknotes with the same purchasing power and the same amount of cash in circulation, in accordance with the law and the sovereign powers of the bank.

“The Central Bank in Sanaa did not print to cover a budget deficit, but the bank itself handled the technical processing of the high percentage of damaged banknotes in this category in the market, thus enhancing circulation and protecting the market from contraction,” he added.

The economic expert emphasized that this measure would solve many of the problems the local market as a result of the deteriorating quality of old currency, noting that this type of printing did not create an inflationary effect, but rather would contribute to stimulating the market and protecting the monetary system from collapse.

“The monetary authority in Sanaa has done its part in replacing worn-out currency with new ones, without any increase in the total money supply,” he explained. “Therefore, there is no justification for the price increases or the exchange rate deterioration. The media uproar is nothing more than the usual political outcry by parties loyal to the coalition and Washington, who were shocked by this sovereign move.”

AA