The Houthis prohibit trading in the new currency and legal accountability for those who possess it

Hafsah Aubel - Sanaa

War, siege, poverty, diseases, all of which existed where there is a Yemeni citizen who pays a heavy price for the conflict between the legitimate government and the Houthi group and the coalition, which expanded in all aspects, especially the economic one.

On December 19, the Central Bank of Sana'a - controlled by the Houthis - issued a decision prohibiting the circulation or possession of banknotes printed by the legitimate government, and explained the statement that the circulation and possession of that currency constituted harm to the national economy.

The bank set a 30-day deadline starting December 19, to hand over to the citizens what they have of the new monetary categories, and if they do not, they will be subject to legal accountability.

Prevent trading in the new currency
A year after the issuance of a similar decision, the Houthi group was able to return this decision, noting that individual citizens who were deceived by non-merchants, banks and money changers will be compensated with electronic cash or the old national currency for their illegal new currency, as stated in the statement.

Saleh Al-Badri, in his fourth decade of life, went to a pharmacy to buy sugar medicine as usual, but he was surprised by the refusal to take the pharmacist the amount of money from him, and told him that he did not accept the new currency, then Saleh went to the black market and replaced it with an old print, but the person who dealt with him deducted an estimated amount With 10% of his real amount as compensation for the old exchange.

Rashid Al-Haddad, a journalist specializing in the Yemeni economy in Sana'a, says that the Central Bank’s announcement in Sanaa of prohibiting the circulation of the currency printed by the “legitimate” Hadi government came under the justification that it is without cover and outside any agreements between the two parties, where the last measure that traders committed not to trade in came simultaneously. With the rise in the exchange rate of the dollar in the local market.

As the exchange of one dollar in Sanaa amounted to 594 riyals, which was considered by the Sanaa Bank as a result of speculation in the exchange rate in the market, which will lead to the deterioration of the remaining stability of living for most Yemenis.

Electronic cash decision
Electronic criticism in some countries, especially in the Horn of Africa, is considered a sound decision to preserve the state's economy because it includes the state in general, but in Yemen there are those who see that the decision issued by the Houthi group in Sanaa is correct, but it may fail, for several reasons hindering its success.

Ahmed Shamakh, the financial and economic expert, says that the decision to stop trading in the new currency and replace it with electronic cash is very appropriate if the subject is studied more and be guided by similar experiences from countries that use the same currency, but it is currently considered appropriate for the current conditions as a result of lack of liquidity and will help stop the deterioration of the economy and the devaluation of the currency.

In Chamakh's opinion, the decision may face obstacles because it will be used in certain governorates only, which impedes internal transactions between the governorates due to the presence of four independent central banks in Yemen, and there will also be obstacles in global commercial transactions because we in Yemen import approximately 90% of our needs From outside.

Al-Haddad returns to clarify that these measures taken by Sanaa have had relative effects in stopping speculation in the currency, but remain temporary measures and not solutions. The solution was and still is in neutralizing the Yemeni economy in general from the conflict and ending the financial division between Sana'a and Aden.

Citizen was damaged
The economic war in general had a great impact on the lives of millions of Yemenis, and led to a significant decline in the exchange rate of the Yemeni currency against foreign currencies, with a rate of decline of 150% since the start of the war and the siege in late March 2015.

Shammakh says that the decision issued by the rescue government "Al-Houthi Group" in Sanaa is a good decision regarding electronic criticism, which may contribute to solving many outstanding problems regarding liquidity and lack of liquidity in the Yemeni banking market.

It deals with the idea of ​​confronting the aggression, "the Saudi-Emirati alliance," which used paper criticism as a tool of the war on Yemen, but he said it may cause harm to the segment of employees who receive their salaries from Aden, and this would be a big problem for them.

When Al-Jazeera Net asked about foreign transfers how they would be received when converting paper money to electronic, Shamakh said that this mechanism will regulate its method, and the citizen may receive it as it is, whether in dollars or in other foreign currency, according to the transfer agreement and the transferee.

Khaled al-Shahari, one of the wholesalers in electronic devices in Sanaa, says he is affected by this decision, and he wondered why he was not prevented from entering the new currency before?

The Yemeni Traders Syndicate in Sana'a announced a comprehensive strike and the closure of their stores on January 1, 2020 due to the measures taken by the Central Bank in Sana'a.

Al-Haddad affirms that these measures negatively affect the economic activity between the north and the south, and will multiply the challenges facing the private sector due to the conflict, and will have negative effects on the movement of funds between banks.

Compensation form
Flowers of an employee of an exchange company explaining how to compensate those who own the money with the new edition now, in the period that the citizen was allowed to change and until the e-riyal went to the market.

She says that the sums of money are transferred from the "new edition" in banks and banks, which are less than one hundred thousand riyals to an old edition, but when the e-riyal goes to the market then we will have certain forms that will be presented to citizens and merchants and distributed in exchange shops and banks and be a request for compensation Financial and later converted into electronic currency.

The Minister of Information in the legitimate government, Muammar Al-Iryani, said in a Tweet on Twitter, "The circular aims to acquire the money of exchange companies, in order to impoverish them and to restrict exchange and trade among the Houthi followers to facilitate the smuggling of group funds to and from abroad."

He pointed out that the circulation of the new currency in Sanaa and other governorates represents more than 30% of the volume of cash liquidity.

Despite the intensification of the economic conflict between the Yemeni parties to the conflict, Moein Shraim, the UN's deputy envoy to Yemen, confirmed last week that there are arrangements being made by the United Nations to hold a round of consultations early next month to solve the economic problem.

This comes in light of the high local and international voices calling for the neutralization of the Yemeni economy from the conflict, and this may be the first calm steps and an essential input to proceed with the comprehensive solution consultations.