Banks in Kabul reopen after twelve days

KABUL: Banks in Kabul reopened after twelve days as the Taliban take control of Afghanistan.

Taliban spokesman, Zabihullah Mujahid, on Tuesday, announced that “All banks in the country including the Central Bank will resume their work as of tomorrow (Wednesday).”

“We have made the appropriate preparations, and therefore, We urge employees of this sector to return to their jobs,” he added.

Taliban earlier also announced the appointment of an acting governor for the “Bank of Afghanistan” for the purpose of “regulating government institutions and banking issues and addressing people’s problems.”

Earlier, there was no cash inside the ATMs, no operational banks and no money transfer office for overseas. With all these utilities closed, it’s now near impossible to send money into the country. People say they are running out of cash.

Azizi Bank, Afghanistan’s largest commercial Bank also announced previously that the bank will stay closed till the new government or system.

As the Taliban has taken control over Afghanistan, it will take a long time before the group gets access to a majority of the country’s monetary reserves and assets.

Currently, Afghanistan faces a danger of a near-term economic collapse, with no access to funds, the developing nation’s cash resources are almost zero at the moment.

Head of Afghanistan’s central bank Ajmal Ahmady, who fled the country at the weekend, tweeted that Da Afghanistan Bank’s total reserves were approximately $9bn as of last week.

But he said as per international standards, most of this was held in safe, liquid assets such as US Treasury bonds and gold offshore.

According to Ahmady, the major investments of DAB include Federal Reserve holdings worth $7 billion, US bills and bonds ($3.1 billion), WB RAMP assets ($2.4 billion), gold ($1.2 billion) and cash accounts (0.3 billion). In addition, there are investments in international accounts ($1.3 billion) and Bank for International Settlements ($0.7 billion).

“Given that the Taliban are still on international sanction lists, it is expected (confirmed?) that such assets will be frozen and not accessible to Taliban,” Ahmady tweeted.

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

Ahmady added that Washington’s suspended shipments of physical dollars were causing Afghanistan’s currency to depreciate. The Afghan currency, the Afghani, has fallen to record lows.

“I believe local banks have told customers that they cannot return their dollars — because [Da Afghanistan Bank] has not supplied banks with dollars,” he tweeted.

“This is true. Not because funds have been stolen or being held in a vault, but because all dollars are in international accounts that have been frozen,” he said.

Meanwhile, International Monetary Fund (IMF) has also announced that Afghanistan will no longer be able to access the lender’s resources.

Resources of over $370m (£268m) from the IMF had been set to arrive on 23 August.

According to IMF, these funds were part of a global IMF response to the economic crisis.

Access to the IMF’s reserves in Special Drawing Rights (SDR) assets, which can be converted to government-backed money, have also been blocked.

Western Union has also suspended money transfer services to Afghanistan “until further notice”.

Raja Furqan Ahmed

Raja Furqan Ahmed is the News Editor of The Pakistan Daily.

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