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الشرق الأوسط
Yemen's liquidity crisis worsens
The Yemeni government is facing an uneven liquidity crisis, characterized by the presence of money in the market alongside its absence from banks. The banking sector suffers from weakened appeal due to regulatory restrictions and declining public trust, leading to a significant portion of liquidity being concentrated outside the formal banking system. Although cash continues to circulate in the market, banks struggle to attract and recycle it, which hampers monetary policies and weakens the economic cycle. This situation is compounded by a nearly 43% contraction in GDP and cumulative economic losses exceeding $126 billion since 2015. Structural factors and regional conflicts further worsen the problem, while the measures taken by the Central Bank remain insufficient without broader institutional reforms to restore confidence and stimulate financial flows.
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