The United States (US) Government has frozen assets worth nearly $9.5 billion belonging to Da Afghanistan Bank and blocked cash from being shipped to the war-torn nation; in a bid to prevent the Taliban from accessing the money; Bloomberg reported based on confirmation by an official familiar with the development.
The move followed a decision by the US treasury secretary Janet L Yellen as well as officials in the Treasury Department’s Office of Foreign Assets Control on Sunday; when it ordered to freeze Afghan government reserves held in US banks.
As a result of this action, the Taliban, which remains on the list of ‘Specially Designated Nationals’, facing financial sanctions; would not be able to access any Afghan central bank assets kept in the US, according to The Washington Post.
The International Monetary Fund estimate put Afghan central bank assets at $9.5 billion till April; a sizable portion of which is in accounts with the New York Federal Reserve and other US-based financial institutions.
Ajmal Ahmadi, the acting governor of Afghanistan’s central bank, took to Twitter on Monday; to post that he came to know about remittances being stopped by the US to prevent the Taliban from gaining access to the money.
Therefore, my base case would be the following:— Ajmal Ahmady (@aahmady) August 18, 2021
– Treasury freezes assets
– Taliban have to implement capital controls and limit dollar access
– Currency will depreciate
– Inflation will rise as currency pass through is very high
– This will hurt the poor as food prices increase
The US government didn’t need any fresh authority to freeze Afghan monetary reserves as the country’s government fell to the Taliban; which continued to face financial sanctions in the aftermath of the 9/11 attack.