SANA'A: Yemen's central bank ordered safeguards to prevent speculative pressure on the Yemeni riyal as it attempts to limit the impact of the financial crisis. A decline in the local currency was not justified by economic fundamentals, it said. The safeguards included barring banks from accepting cash deposits in Saudi riyals and the closure of the accounts of local money changers, Saba News Agency reported Thursday, citing central bank Governor Mohammad Awad Bin Humam. The bank also warned of penalties against speculators. It will continue to support banks in meeting customer needs, Bin Humam said in a meeting with bank executives in Sana'a Thursday. Yemen needs funds to bridge its fiscal gap, the biggest in the Gulf. The nation has for the past month been the scene of domestic uprisings, similar to those that toppled the leaders of Egypt and Tunisia, as protesters demand an end to the three-decade rule of President Ali Abdullah Saleh. Growth in the $30 billion economy will slow to 4.1 percent this year, from 8 percent in 2010, the IMF said in its October Regional Economic Outlook report. Yemen's Parliament said March 15 it would question Bin Humam over accusations that he was “fabricating a crisis” to prevent foreign currency from entering the market. Humam, in an interview Jan. 20, said the central bank was able to stabilize the exchange rate by selling about $577 million to the market to satisfy demand and also by increasing the benchmark interest rate from 10 percent to 15 and 20 percent. Arab and international investment in Yemen has decreased and tourism has also declined, the government's latest General Investment Authority said in a report. The report compares figures between last year and 2009. It indicates that Arab and foreign investments registered last year totaled 164 projects with an income of YR129 billion. However, in 2009 there were 272 projects with an income of YR314 billion. This is a drop of 108 projects and a loss of YR185 billion income. The investment authority said that there was a drop in the number of the Gulf investment projects which last year totaled 12 projects with an income of YR19 billion. The previous year there were 14 projects totaling YR113.572 billion. There were eight Saudi Arabian projects valued YR202 billion and two Kuwaiti projects valued at YR16.5 billion. The biggest of these projects were a joint Yemeni-Kuwaiti real estate project, a Qatari farm costing YR200 million and a UAE project of YR41 million. The General Investment Authority's records showed that Saudi investment projects in Yemen last year were third place on an investment list. This included four tourism projects, an industrial project and an agricultural project, said the authority. Other investors were from Egypt, Kuwait, Jordan, Qatar, Lebanon, Syria, Malaysia, Turkey, Tanzania, China, Britain, France, Canada and America. These investment projects created hundreds of jobs, said the authority. Economic sources said a number of Gulf and Yemeni investors have delayed the establishment of five iron, sugar and cement plants in a number of governorates, particularly in southern parts of the country where violence has been the worst in recent months. This includes Aden, Hadramout, Shabwa in the south east, Hodeida in the west and Marib in the east. The Economist magazine reported that a number Yemeni and Gulf investors were forced to delay their projects because of a currently inappropriate investment climate. Saudi Gazette with agencies __
