The new head of the central bank of Afghanistan, Mohammad Idris, said that the banking sector is in “good condition and complete security”. The government is trying to assure local businesses that financial life in the country will recover, despite the loss of foreign exchange reserves of the central bank, writes Bloomberg.
“Given the economic situation in the country, all banks […] and companies, including retailers, will soon again conduct operations in the usual manner and on a regular basis and conduct their business with full confidence, “Idris said in a statement on the official website of Da Afghanistan Bank. However, after the banks opened in August, the Central Bank ordered them to limit the number of withdrawals to $200 per week for each client.
Idris ‘ statement came a day after the Taliban requested additional humanitarian assistance from the international community. The United Nations has announced that it is ready to provide more than $1.2 billion in emergency aid to Afghanistan to allow the country to recover from two decades of war.
After learning about the seizure of power by the Taliban, the International Monetary Fund and other Western organizations suspended programs to support the Afghan economy, which is very dependent on foreign injections. They explained their decision by saying that they cannot transfer funds until the new government has received international recognition. In addition, the Taliban were denied access even to the country’s national reserve — the United States froze the assets of the Central Bank of Afghanistan on the accounts of its banks.
Despite the Taliban’s assurances about the normalization of the financial sector, experts are wary about the future of the Afghan economy. At the end of August, former German diplomat and UN official Hans-Jakob Schindler, who worked on sanctions against the Taliban, said that the country’s prospects are “terrible” and the economy is threatened with the collapse in the coming weeks. Residents are faced with a sharp jump in food prices and are forced to worry about how to feed their family and pay for housing.