Following the Taliban‘s rapid takeover of Afghanistan, President Joe Biden’s administration has confirmed that no central bank assets of the Afghan government in the United States will be made available to the militant organisation, according to media reports.
The country’s central bank, Da Afghanistan Bank (DAB), has reserves of roughly $9 billion (£6.5 billion) — foreign currency, gold and other treasures in its vaults — in most of which is held in America, according to BBC reports.
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Most of the assets are held outside Afghanistan potentially putting most of them beyond the insurgents’ reach, according to Afghan officials, including the bank’s acting governor, Ajmal Ahmady, who was forced to flee the country on the weekend.
But he said as per international standards, most of this was held in safe, liquid assets such as US Treasury bonds and gold offshore.
“Given that the Taliban are still on international sanction lists, it is expected (confirmed?) that such assets will be frozen and not accessible to Taliban,” Ahmady said in a Twitter thread on Wednesday.
Meanwhile, Ahmady warned that shipments of dollars, international loans and aid are also in doubt after the militants took control.
“We can say the accessible funds to the Taliban are perhaps 0.1-0.2% of Afghanistan’s total international reserves. Not much.”
Furthermore, he said that without US Treasury clearance, no funders would be willing to finance the Taliban administration. It’s also uncertain if the IMF would proceed with a $340 million loan to DAB scheduled to arrive on August 23.
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Ahmady also said shipments of dollars that the DAB relied on due its large current account deficit had been stopped.
All of this he said was likely to lead to runaway inflation and a collapse in the country’s currency that would hurt the poor.
Afghanistan’s economy is already shaky, and the country relies largely on international help, most of which is in jeopardy. Due to high levels of corruption, there is also little in the form of foreign business investment.