(Photo credit: Victor J. Blue/Bloomberg/Getty Images)
Afghanistan’s Central Bank (DAB) Governor Ajmal Ahmady announced on 18 August that the nation’s reserves will be frozen and remain inaccessible to the Taliban.
On his Twitter account, Ahmady detailed the current state of Afghanistan’s reserves, claiming the country has around $9 billion in reserves in “safe, liquid assets such as Treasuries and gold.”
A DAB financial statement posted online on 21 June shows that the bank’s assets included about $1.3 billion worth of gold reserves, $362 million in foreign currency cash reserves, and $6.1 billion in bank-owned investments, all based on currency conversion rates at the time of the report.
According to UNESCO, the DAB’s vaults also contain a hoard of 2,000-year-old gold jewelry, ornaments, and coins known as the Bactrian Treasure.
According to the DAB chief, the freeze of assets means the Taliban currently only has access to “perhaps 0.1 to 0.2 percent of Afghanistan’s total international reserves.”
Therefore, we can say the accessible funds to the Taliban are perhaps 0.1-0.2% of Afghanistan’s total international reserves. Not much
Without Treasury approval, it is also unlikely that any donors would support the Taliban Government. https://t.co/UTrkms6i42
— Ajmal Ahmady (@aahmady) August 18, 2021
The announcement comes as the Taliban has reportedly been questioning DAB staff on the whereabouts of the country’s assets as they work to form a viable government in Afghanistan.
Finally, Ahmady expected the freezing of international assets to force the Taliban to implement capital controls and limit access to the dollar, causing the currency to depreciate further and inflation to rise. This, in turn, would pave the way for the price of goods to increase and for poverty to spread even further in the war-torn nation.