PARLIAMENTARY COMMITTEE: FISCAL, MONETARY STATUS STILL IN GOOD SITUATION

SANA'A, April 12 (Saba) - The Parliament reviewed on Monday the report of the Special Committee on studying the developments of the national currency exchange rate in Yemen.

The parliamentary committee pointed in its report that the fiscal and monetary conditions are still in good situation ,noting that the country has sufficient foreign exchange to cover all the country needs from imports as well as the needs of the exchange market.

The committee indicated that there is an increase in the produced quantity of oil and the government's share of it, which enhances the balance of payments.

In its report, the committee explained that it had studied the factors and causes that led to the deterioration of the national currency with the aim of diagnosing the real problem and then discuss with the government side the nature of treatments and solutions.

The committee noted to the importance of the commitment to achieve the economic stability and to be a top priority and to control the budget deficit and finance it from safe and real sources, and not to repeat what happened in 2009 through financing the deficit from inflationary sources by monetary issuance, which was the main reason for the damage experienced by the national currency and resulted in the rise of prices.

The committee stressed the importance of the review of the monetary and credit policy, so as to make it an effective tool to achieve stability and economic growth in a scientific and studied way in order to avoid random review of interest rates, which caused extensive damage at the national currency and the national economy in general.

Moreover, the committee called for reconsidering the policy of the Central Bank with regard to the mechanism to intervene in the exchange market in terms of timing and size of the intervention and availing from the experience of past years.

It urged to work on the development of non-oil resources through the firm application of the tax laws and reformation of the revenue departments under the recommendations of the parliament repeated in this aspect.

The committee affirmed the importance of completing the structural reforms in financial and administrative aspects in the investment environment, particularly the security and judicial aspects, without selectivity, which were to be synchronized with the implementation of the economic reform program.

It also stressed the importance of the development and rehabilitation of Aden refinery to enable it to expand production and the encouragement of the private sector to invest in the establishment of oil refineries to meet the needs of the country from oil derivatives, in addition to working hard to develop the sectors of agriculture, industry, tourism and fisheries.

The committee noted the significance of providing support aspects to double Yemen exports of goods and services, so as to avail from the available opportunities associated with adopting a policy of economic openness and integration into the international economy to increase the country resources of foreign currency and to diversify the income sources.

In this regard, the committee pointed out the importance of working on the rationalization of oil products consumption and combating the internal and external smuggling of the oil derivatives, and following up the recovery of debt and collection of the state's share from the current activity surplus in the public and mixed economic sector units as well as strengthening the independence of the Central Bank as an independent monetary authority.

Also in its report, the committee dealt with the importance of implementing the recommendations of the parliament repeated and included in the reports of public budgets, the latest of which was the 2010 budget, on besieging the budget deficit, controlling the inflation and achieving stability in the exchange rate and coordination between the fiscal policy implemented by the Ministry of Finance and the Central Bank.

In this respect, the committee suggested a number of recommendations to guide the government to address the current situation of the national currency status.

BA