Master's degree with honors for researcher Wahid Al-Foudai from the University of Aden

Today, Thursday, the Faculty of Economics and Political Science at the University of Aden witnessed the discussion of the master's thesis submitted by researcher Wahid Al-Foudai, which bore the title "Evaluation of the Performance of the Central Bank of Yemen and the Requirements for Institutional Reform for the Period 2016-2023."

The discussion committee consisted of Associate Professor Dr. Saliha Muhammad Ali, who chaired the committee and supervised the thesis scientifically, Associate Professor Dr. Muhammad Salih Al-Kassadi as a member and external examiner, and Assistant Professor Dr. Munser Mahdi Habtoor as a member and internal examiner.

After an extensive scientific discussion and in-depth analysis of the thesis and its content, the committee announced the acceptance of the scientific thesis with a very high distinction rating, with a score of 98%, praising the great efforts made by the researcher in presenting a distinguished scientific study that addressed a central topic related to the Yemeni economy.

The thesis focused on studying the performance of the Central Bank of Yemen during a historical period full of economic and political crises, highlighting the most prominent challenges faced by the bank, most notably the impact of war and political divisions that were directly reflected in the country's economic performance.

The study revealed a deterioration in the gross domestic product and a significant increase in inflation rates, as a result of the collapse of the local currency and the decline in public revenues, in addition to the cessation of oil exports, which led to an exacerbation of the financial deficit and forced the authorities to resort to printing money or borrowing to cover needs.

During the discussion, the researcher pointed out that the division in monetary policies between Sana’a and Aden was a major obstacle for the Central Bank, which exacerbated economic problems, including currency speculation and ill-considered money printing, which contributed to the deterioration of the exchange rate.

The researcher also highlighted the fragility of the institutional structure of the Central Bank in Aden, as the physical and technical infrastructure suffers from great weakness, in addition to the antiquity of the regulatory laws and their lack of suitability to modern economic and technological developments.

The study showed that the Central Bank is unable to activate most monetary policy tools, as it faces difficulties in using indirect tools such as the required reserve ratio, interest rate, and open market operations, which made it rely mainly on the exchange rate tool.

However, the results showed that this tool was not sufficient to achieve stability due to complex economic and political factors. The study confirmed that the money supply negatively affected the exchange rate, inflation and GDP, noting that foreign reserves and Saudi deposits helped achieve temporary stability for the currency, but were not sufficient to achieve long-term sustainability.

The study came out with a set of recommendations, the most prominent of which was the need to update laws and legislation to keep pace with economic changes, enhance the physical and technical infrastructure of the Central Bank, develop the organizational structure, and attract qualified talent.

The recommendations also stressed the importance of enhancing the bank’s independence in making monetary and administrative decisions, adopting modern risk-based regulatory methodologies, and establishing a liquidity support fund with the aim of enhancing the stability of the monetary market.

The study called for improving coordination between monetary and fiscal policies, enhancing local and international confidence in the banking system through institutional governance and transparency, and activating electronic payment systems to ensure efficiency and sustainability.

The discussion concluded with high appreciation from the committee members for the researcher Wahid Al-Foudai, stressing that the study represents a distinctive scientific addition that sheds light on essential issues related to the Yemeni economy, and provides important insights that can be used to enhance the performance of the Central Bank and achieve sustainable economic stability.