Taliban Can't Access Central Bank's $9B in Reserves

The Taliban now control Afghanistan, but they don't have access to the central bank's currency reserves, and the Biden administration aims to keep it the way. Ajmal Ahmady, Afghanistan's central bank chief, fled the country on Sunday. He tells the Wall Street Journal that almost all of the bank's $9 billion in reserves is held overseas, and with the US blocking access, "the amount accessible to the Taliban is almost 0.1%." The reserves include $7 billion in assets at the US Federal Reserve and $1.3 billion held in other international accounts, Ahmady said in a series of tweets Wednesday. He said there are currently almost no dollars in the country because a shipment approved late Saturday and bound for the Central Bank of Afghanistan never arrived. "Seems like our partners had good intelligence as to what was going to happen," he wrote.

Ahmady said the central bank depended on shipments of cash every few weeks. He predicted that with access to dollars extremely limited, the country's currency, the afghani, will depreciate, leading to very high inflation. The Taliban "won militarily—but now have to govern," he wrote. "It is not easy." The Biden administration has blocked access to the reserves held in the US, and lawmakers are urging Treasury Secretary Janet Yellen to try to block a scheduled release of International Monetary Fund bailout reserves that could give the Taliban access to $450 million, the New York Times reports.

• Trade could grind to a halt. The US and the European Union have placed sanctions on the Taliban as a terrorist organization—and with the group now in charge of the country, analysts say the designation could halt cross-border trade. Sources tell the Journal that the US is also considering declaring the entire country a "sanctioned jurisdiction," like North Korea.
• But isolation may not be complete. While the US is working to isolate the new Taliban regime economically, it will be a tougher task to isolate the country diplomatically, the Economist reports. Beijing and Moscow both hosted Taliban delegations last month, and leaders of countries including Iran and Pakistan congratulated the group after the fall of Kabul.

(More Afghanistan stories.)