The Taliban is facing drying up of international financial flows

The Taliban is facing drying up of international financial flows

From Saturday 14 August, on the eve of the fall of Kabul, residents rushed to banks and ATMs to withdraw their deposits. without success. On Sunday at sunrise, a few hours before the fall of the capital, endless queues formed in front of banking institutions, which ceased to distribute money to account holders. It has since been closed. Western Union, which handles transfers from abroad, is no longer active.

The local economy operates mainly through cash payments. But at the moment, the daily life of the population in Afghanistan has not been turned upside down after the closure of the counters. “Only those who have traveled or lived abroad are upset today because their assets in Afghan banks can be lost forever.”He explains that Ahmed (a pseudonym) was contacted by phone in Kabul. A businessman does not trust Afghan financial institutions, ‘The situation is uncertain’.

But how long can the state survive in a financial system that is almost completely frozen? One by one, international funding for Afghanistan is drying up. International aid, which accounts for 42% of GDP, has been largely suspended, the International Monetary Fund has frozen its payments, and US authorities have blocked dollar transfers.

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Until then, the country had been receiving a weekly shipment of dollars, transported from the United States, from the reserves of the Central Bank of Afghanistan, DAB. Shortly before the fall of Kabul, the last shipment of stamped pallets of green coins was halted by the US government. ” Friday [13 août]employment I got a call that no more dollars would be sent, while a call was expected on Sunday, the day Kabul fell.”employment Explanation on Twitter Ajmal Ahmadi, the acting governor of DAB, who fled the country on Sunday the 15th, on a military plane.

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“sand in gears”

However, these dollars are essential to the functioning of the Afghan economy, explains Warren Coates, an American who worked as a consultant to DAB from 2002 to 2015. Every week the central bank organizes an auction of dollars for the local Afghani currency. Currency exchange offices come from all over the country for stocking. For example, American money is sent to the provinces, used to finance trade with neighboring countries – and to keep the savings of the richest population.

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