IMF blocks Afghanistan’s access to funds

Afghanistan will no longer be able to access the International Monetary Fund’s resources. A spokesperson for the IMF said it was due to a “lack of clarity within the international community” over determining a government in Afghanistan. This comes after the Taliban took over Afghanistan last weekend.

Resources worth over $370 million were expected to reach Afghanistan on August 23, as a part of the global IMF response to the economic crisis.

“As is always the case, the IMF is guided by the views of the international community,” the spokesperson added.

A Biden administration official recently told the BBC that the Taliban will not have access to any central bank assets that the Afghan government has in the US.

In a letter to the US Treasury Secretary Janet Yellen, Congress members called for assurances that no US-backed aid will be given to the Taliban

“The potential of the SDR allocation to provide nearly half a billion dollars in unconditional liquidity to a regime with a history of supporting terrorist actions against the United States and her allies is extremely concerning,” 17 signatories wrote.

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In June, the IMF gave Afghanistan its latest loan instalment which was approved in November. The UN published a report in the same month, stating that the “primary sources of Taliban financing remain criminal activities,” including “drug trafficking and opium poppy production, extortion, kidnapping for ransom, mineral exploitation and revenues from tax collection in areas under Taliban control or influence.”

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In April 2019, when over 50 countries refused to recognise President Nicolas Maduro as the legitimate leader of Venezuela, the IMF blocked the Special Drawing Rights (SDR) access. The IMF also stopped payments to Myanmar after the military junta seized control.

On Monday, the IMF will be completing a $650 billion allocation of SDRs to its 190 member countries.