Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

REPUBLIC OF YEMEN

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2005
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(Position as of December 31, 2004)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: December 10, 1996.
Exchange Arrangement
CurrencyThe currency of the Republic of Yemen is the Yemeni rial.
Exchange rate structureUnitary.
Classification
Independently floatingThe exchange rate of the rial is determined by supply and demand in the foreign exchange market.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirements
Use of foreign exchange among residentsYes.
Payments arrangementsNo.
Administration of controlExchange control authority is vested with the Central Bank of Yemen (CBY).
International security restrictions
In accordance with UN sanctionsThe funds of listed individuals and organizations associated with terrorism have been frozen.
Payments arrears
OfficialYes.
PrivateYes.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesThe exports and imports of rial banknotes are prohibited.
On exports
Domestic currencyYes.
On imports
Domestic currencyYes.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsYes.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Letters of creditYes.
Import licenses and other nontariff measures
Negative listTariff rates range from 5% to 25%. Some imports are banned for security, health, or religious reasons. Imports of used machinery and coffee are prohibited, and imports of certain fruits and vegetables are subject to seasonal tariff rates. All imports from Israel are prohibited.
Import taxes and/or tariffsCurrently, there are four tariff rates: 5%, 10%, 15%, and 25%.
State import monopolyImports of petroleum products are reserved for the Yemen Petroleum Company.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExports are registered for statistical purposes. Exports to Israel are prohibited.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operations
Commercial credits
To residents from nonresidentsYes.
Financial credits
To residents from nonresidentsShort-term foreign loans by the public sector are prohibited. Approval by the Council of Ministers is required for contracting medium- and long-term foreign loans by the public sector.
Guarantees, sureties, and financial backup facilities
To residents from nonresidentsYes.
Controls on direct investmentNo.
Controls on liquidation of direct investmentLiquidation of direct investments is free for approved and registered projects.
Controls on real estate transactionsNo.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutions
Differential treatment of deposit accounts in foreign exchangeForeign exchange deposits held at the CBY are not remunerated.
Open foreign exchange position limitsCommercial and specialized banks are required to observe prudential regulations regarding currency exposure and to report their positions.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investorsNo.
Other controls imposed by securities lawsNo.
Changes During 2004
No significant changes occurred in the exchange and trade system.

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