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) :

Item

2000

2001

2002

2003

2004

2005

2006

2007

State's public revenues

599

562

579

688

836

1155

1449

1524

State's public expenditures

502

522

594

777

890

1195

1419

1427

Monetary rolling

197

213

239

269

298

330

413

426

Deposits in demand

50.1

69.9

67.1

78.6

92.6

111

146

188

Deposits in local currency

81.1

96.3

139.1

179.5

239.5

251.5

339

456

Deposits in Foreign currency

146.1

184

219.1

270.4

287.2

355

454

516

Monetary Supply

474.5

563

664.6

797.3

917.2

1049

1351

1586

 

(table showing the number of banks and the date of incorporation, capital of each bank)

Bank

date of incorporation

Paid Capital (Million rials)

Capital proprietorship %

government

Public

private

Foreign

Central Bank of Yemen

1971

2000

100

-

-

-

Yemen B. for Recon, and Development

1962

2000

-

51

49

-

National Bank of Yemen

1969

2100

100

-

-

-

Yemeni Commercial Bank

1993

1234

-

10

90

Yemen and Gulf Bank

2001

1250

-

1

77

22

International Bank of Yemen

1979

1250

-

-

79.6

20.4

Arab Bank

1972

2000

-

-

-

100

Calyon

1975

1304

-

-

-

100

United Bank

1972

1250

-

-

-

100

Bank Alrafedain

1982

60

-

-

-

100

Tadhaon Islamic Bank

1996

3000

-

-

96.7

3.3

Islamic Bank of Finance

1995

1250

-

4.5

73.5

22

Saba Islamic Bank

1997

1974

-

-

85

22

Credit Bank of Housing

1977

200

-

97

3

-

Agriculture & Cooperative Bank

1982

293

-

86.7

13.3

-

Yemen Kuwait Bank

1979

1250

-

-

100

-

Shamil Bank of Yemen and Bahrain

2002

2000

-

-

75

25