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Saturday, April 13, 2024

    Will The Taliban Have Access To Afghan Central Bank Money?

    Most of the Afghan central bank’s reserves are frozen at the Federal Reserve. And the International Monetary Fund will block more than $400 million in aid.

    Despite the chaotic end to its presence in Afghanistan, the United States still has control over billions of dollars belonging to the Afghan central bank, money that Washington is making sure remains out of the reach of the Taliban.

    About $7 billion of the central bank’s $9 billion in foreign reserves are held by the Federal Reserve Bank of New York, the former acting governor of the Afghan central bank said Wednesday, and the Biden administration has already moved to block access to that money.

    The Taliban’s access to the other money could also be restricted by the long reach of American sanctions and influence.

    The central bank has $1.3 billion in international accounts, some of it euros and British pounds in European banks, the former official, Ajmal Ahmady, said in an interview on Wednesday.

    Remaining reserves are held by the Swiss-based Bank for International Settlements, he added.

    Mr. Ahmady said earlier on Wednesday that the Taliban had already been asking central bank officials about where the money was.

    “We can say the accessible funds to the Taliban are perhaps 0.1-0.2% of Afghanistan’s total international reserves,” he wrote on Twitter. “Not much.”

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    Other funding has been undermined. The International Monetary Fund said on Wednesday that it would block Afghanistan’s access to about $460 million in emergency reserves.

    The decision followed pressure from the Biden administration to ensure that the reserves did not reach the Taliban.

    Money from an agreement reached in November among more than 60 countries to send Afghanistan $12 billion over the next four years is also in doubt.

    Last week, Germany said it would not provide grants to Afghanistan if the Taliban took over and introduced Shariah law, and on Tuesday, the European Union said no payments were going to Afghanistan until officials “clarify the situation.”

    The central bank money and international aid, essential to a poor country where three-quarters of public spending is financed by grants, are powerful leverage for Washington as world leaders consider if and when to recognize the Taliban takeover.

    Mr. Ahmady, who fled Afghanistan on Sunday, said he believed the Taliban could get access to the central bank reserves only by negotiating with the U.S. government.

    Other sources of funding would be difficult to get. The Taliban could seek financial support from China, with which it held high-profile talks last month.

    But so far, China hasn’t shown an eagerness to increase its role in Afghanistan. The Taliban could try to take advantage of the country’s vast mineral resources through mining, or finance operations with money from the illegal opium trade.

    Afghanistan is the world’s largest grower of poppy used to produce heroin, according to data from the United Nations Office on Drugs and Crime.

    But these alternatives are all “very tough,” Mr. Ahmady said. “Probably the only other way is to negotiate with the U.S. government.”


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