Participants in a seminar on the monetary policy affirm the lack of coordination between these policies and fiscal and economic policies
Date : 2011-03-09 11:56:45
In the seminar organized by the SCSS on Monday, March 7, the participants affirmed the lack of coordination between the monetary policies on the one hand and the fiscal and macroeconomic policies.
The events commenced with a paper presented by Dr. Mohammed Abdulhamid Farhan, the head of the Department of Finance and Banking, the Arab Academy for Financial and Banking Sciences, Sana'a. In this paper entitled "Analyzing the Role of Monetary Policy in Monetary Stability in Yemen, 2006 – 2010", Dr. Mohammed pointed out that the monetary policy during the abnormal conditions in Yemen throughout 2009 to 2010 had failed to secure monetary stability, highlighting a negative correlation between the size of intervention on the exchange rate volatility and the external reserves and the failure of the monetary policy reflected by the decline of intervention from 75% in 2009 t0 31% in 2010.
The researcher confirmed that the domestic public debt is about to reach YR 0.5 trillion, which has left the public budget burdened with further debt service and that the policy of debt management has failed to achieve stability in exchange rates as a result of the negative impact triggered by the Treasury bills and bonds on funding the producing investments that would create job opportunities and promote the diversification of exports.
The comments provided by the other participants focused on the necessity for the independence of Yemen Central Bank and restructuring it in line with such independency, as well as the significance of connecting the monetary policy with the financial policy and the macroeconomic management in a manner that would achieve a successfully producing economy.