According to Bloomberg reported on the 19th, the International Monetary Fund (IMF) said that in the days before the new Afghan regime was about to obtain nearly $500 million in funds, the IMF had cut off its channels to use the fund reserve assets. This has deprived the Taliban of critical resources.
Taliban fighters on patrol (Source: foreign media)
As part of the IMF's recently approved plan to inject $650 billion in liquidity into the troubled global economy, the Afghan government will automatically secure new foreign exchange reserves, known as special drawing rights (SDRs), on Monday. However, the IMF said that while Afghanistan would still have access to the assets, it would not have the right to use them because the new regime lacked international recognition.
An IMF spokesman said in an email on Wednesday: "As always, the IMF is guided by the attitude of the international community. The current lack of clarity on the part of the international community in recognizing the Afghan regime has prevented the country from obtaining special drawing rights or other resources provided by the International Monetary Fund. ”
Bloomberg noted that this is a blow to the new Afghan government, which remains largely at a very low level of development despite more than 20 years of U.S. efforts to boost the Afghan economy and banking sector. According to the World Bank, nearly three-quarters of Afghanistan's nearly 40 million citizens live in rural areas, while most of the country's banks are located in only three major cities.
The Afghan currency is not accepted for cross-border trade, which makes the country dependent on the us dollar and hawala, an informal transfer system commonly used in Muslim countries.
Infographic
A U.S. Treasury official said the Biden administration has been taking steps to prevent the Taliban from using foreign exchange reserves allocated by the International Monetary Fund. Eighteen Republican lawmakers also wrote to U.S. Treasury Secretary Janet Yellen asking her to intervene in the International Monetary Fund to prevent the Taliban regime from using these foreign exchange reserves.
A government official confirmed Tuesday that the United States had frozen nearly $9.5 billion in assets at the Central Bank of Afghanistan and stopped shipping cash to Afghanistan. The official said any central bank assets of the Afghan government in the United States would be barred from being transferred to the Taliban, which remains on the Treasury Department's sanctions list.
Bloomberg noted that while the U.S. cannot unilaterally change the international community's recognition of a country, it is the IMF's largest shareholder to date, with 16.5 percent of the voting power, nearly three times that of Japan and China. At the Washington-based IMF, Americans' views tend to have a significant impact.
U.S. Secretary of State Blinken is likely to pressure other countries not to recognize the Taliban.
The Taliban enter the Afghan presidential palace (Source: foreign media)
One of the problems that Afghanistan needs to address is the leadership of the country's central bank. Ajamal Ahmadi, the governor of the Central Bank of Afghanistan (DAB), fled the country earlier this week. DABLian has $9.5 billion in assets, a significant portion of which are held in accounts with the Federal Reserve Bank of New York and U.S. financial institutions.
Mark Sobel, a former U.S. representative to the IMF's executive board and a longtime Treasury department official, said: "The government is not recognized, and it will take a while to resolve this." Even so, I don't know if there are any people [on the Afghan side] who can be contacted and dealt with by the central bank governor or the IMF. This is unlikely to be resolved in the coming weeks. ”
(Editor: WDQ)