The Biden administration has no plans to release billions in Afghan gold, investments and foreign currency reserves parked in the United States (US) that it froze after the Taliban’s takeover, despite pressure from humanitarian groups and others who say the cost may be the collapse of Afghanistan’s economy.
With the Taliban taking over Kabul, the US government had instantly jammed Afghan reserves to avoid billions landing in the Afghan Taliban’s lap.
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The Afghan central bank’s gross reserves totalled $9.4 billion at the end of April, according to the IMF. The majority of these funds are held outside of Afghanistan.
As stated earlier in my column: “It will have to contend immediately with a liquidity crunch as the flow of funds stops..& denied access to billions of $s belonging to the Afghan central bank reserves….depreciation fuel inflation” https://t.co/0VJL2wD86qhttps://t.co/j3LUrpUwdy https://t.co/eONCt35ena
— Javed Hassan (@javedhassan) September 2, 2021
Washington has indicated that the Afghan Taliban will not have access to assets held in the United States, without specifying the total amount there.
IMF announced that it stopped aid flows to Afghanistan. An IMF spokesman said that “As is always the case, the IMF is guided by the views of the international community. There is currently a lack of clarity within the international community regarding recognition of a government in Afghanistan, as a consequence of which the country cannot access SDRs [special drawing rights] or other IMF resources.”
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“If our Western colleagues are actually worried about the fate of the Afghan people, then we must not create additional problems for them by freezing gold and foreign exchange reserves,” said the Kremlin’s envoy to Afghanistan Zamir Kabulov.
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