Wednesday, October 27, 2021

Afghan Central Bank withdraws dollar reserves before Taliban takeover: Report

The Afghan central bank was drained of most of its US dollar cash reserves in the weeks before the Taliban’s takeover of Kabul, according to an assessment prepared for the country’s international donors.

Afghanistan’s severe cash crunch began before the Taliban militant group took control of Kabul, according to a confidential, two-page brief obtained by Reuters. The document was authored earlier this month by senior international economic officials for institutions including the World Bank and the International Monetary Fund (IMF).

Briefly criticized for how the central bank’s former leadership handled the crisis in the months leading up to the Taliban takeover. This included the decision to auction off unusually large amounts of US dollars and transfer funds from Kabul to provincial branches, with the amount held at these branches rising from $12.9 million in 2019 to nearly $202 million at the end of last year. Some of that money was stolen, the report said, without specifying how much.

According to News Wire, the report said, “FX (foreign exchange) reserves in CB (central bank) vaults in Kabul have been exhausted, CB cannot fulfill … cash requests.” “The biggest source of the problem is the mismanagement at the central bank prior to the Taliban takeover.”

Shah Maharabi, chairman of the central bank’s audit committee, who took over after the Taliban takeover, defended the central bank’s handling of the crisis, saying the leadership was working to prevent a run on the local Afghan currency.

Cash shortages can be seen on the streets of cities in Afghanistan, with people queuing for hours to withdraw dollar savings amid strict limits on how much money they can withdraw.

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The economy was struggling before the Taliban takeover on August 15, but the terrorist group’s withdrawal and the sudden cessation of billions of dollars in foreign aid have plunged it into deep trouble.

Soon after the Taliban took control, the IMF and the World Bank suspended the country’s access to global financial resources amid uncertainty over whether the Islamic terrorist group would be recognized as Afghanistan’s legitimate government.

The World Bank at the time cited concerns “the impact on the country’s development prospects, especially for women”. Separately, in August the Biden administration sealed Afghan government reserves held in US bank accounts, preventing the Taliban from accessing billions of dollars, The Washington Post first reported.

Deborah Lyon, the UN Secretary-General’s Special Representative for Afghanistan, warned earlier this month of an imminent economic collapse unless frozen funds were released to the country.

“The economy should be allowed to breathe for a few more months, giving the Taliban a chance to demonstrate resilience and a genuine willingness to do things differently, especially from a human rights, gender and counter-terrorism standpoint, this time. ” He said. .

Reuters contributed to this report.

isabelle van bruggen

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Isabel van Bruggen is an award-winning journalist and currently a news reporter at The Epoch Times. He holds a Masters in Newspaper Journalism from City, University of London.

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This News Originally From – The Epoch Times

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