The Central Bank of Yemen was established in 1971. After the reunion of the northern and south sectors of Yemen on 22nd May 1990, the Central Bank of Yemen merged with the Bank of Yemen and was assigned the original name, “Central Bank of Yemen”.
The Central Bank of Yemen is an independent body established by Law to carry out those functions that are typical to central banks. The bank is headquartered in Sanaa. The objectives of the bank can be broadly classified as:
As the central bank of the country, the Central Bank of Yemen is required to undertake following activities:
Monetary Policy measures
The Central Bank of Yemen uses all tools of monetary policy at its disposal in order to check and control the inflation levels. As part of its central banking functions, the bank is also required to stabilize the exchange rate of the national currency.
The Central Bank of Yemen has the sole responsibility of issuing the notes and coins and controlling their circulation.
Management of the official reserves
The Central Bank of Yemen is solely responsible for holding and managing the official foreign exchange reserves of the country and investing it prudently.
Acting as the Banker’s Bank
The Central Bank of Yemen is also responsible for acting as the banker to the country’s banks.
Banker to the Government
The Bank is also required to act as the Banker to the Government and also advice it on economic, monetary and financial matters.