Financial and banking activity
the Yemeni government adopted financial and monetary policies working to curb inflation, reduce state's overhead spending the and the removal of subsidies on basic goods to provide this support for the general budget and the financing of investment projects .It also adopted a monetary policy in the form of the unification of the exchange rate and floating with the aim of achieving relative stability for rial versus other currencies The Central Bank of Yemen took many actions, and most importantly the liberalization of dealing in foreign currency and the issuance of treasury bonds, which is considered as one of the main instruments to absorb monetary liquidity and reduce the rate of growth of monetary supply and inflation, one of the main ways to finance the deficit in the state's general budget .The Central Bank of Yemen takes over the political management of cash to meet the requirements of the national economy and it has full independence in the exercise of its functions, control and supervision of the banking system in accordance with the Law of the Central Bank of Yemen.
The financial and monetary indicators reflect the bulk of developments this sector is witnessing, where the state's public revenues increased from 599 billion rials in the year 2000 to 1449 billion rials in 2006 with a growth rate of 141.90% during that period(2000-2006). As for the State's overhead spending, it grew from 502 billion riyals in the year 2000 to 1419 billion rials in 2006 with a growth rate of (182.67%) . Current expenditures constitute more than 70.73% of the total public expenditure. while the capital and investment expenditure represent between (15-25)% of the total public expenditure. As for the banking activity, the number of commercial banks and their branches increased so the number of banks reached (18) banks, including the Central Bank of Yemen , Bank and banks, commercial banks: (12), Islamic Banks: (3), and specialized banks: (2), their branches are distributed in various governorates, where the number of branches of these banks reached (214) branches by the end of 2006. Regarding the size of the banking activity , the cash supply grew at an annual average size of (19.14)% during the period 2000- 2006, the growth rate of deposits in demand reached (20.31)%, the growth rate of deposits in local currency : (27.58)% While the growth rate of deposits in foreign currency reached (20.02)% during the same period.
The main financial and monetary indicators (billion Rial) :