Taliban fighters fly their flag while on patrol in Kabul (Afghanistan), Thursday, August 19, 2021. Rahmat Gul/AP
The Taliban can't get their hands on Afghanistan's central banks' nearly $10 billion worth of reserves.
The Federal Reserve Bank of New York is believed to hold $7 billion of the reserve funds of the central bank.
After the Taliban's takeover of Afghanistan, the US had most of the assets of the central bank frozen.
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Although the Taliban may have taken control of Afghanistan, they are unable to access its central bank's almost $10 billion worth of reserves. Most of this is reported to be held by the Federal Reserve Bank of New York.
According to the Financial Times, Taliban members tried to inspect Afghanistan's foriegn reserves worth billions of dollars last week. However, officials from Da Afghanistan Bank, the country's central bank, told them that they couldn't access the money because it was being held by the Federal Reserve Bank of New York, Manhattan.
However, the US has frozen most of the assets of the central bank worth $9.5 billion. This was after the Taliban quickly took control of Afghanistan in the aftermath of the collapse of the Afghan government.
Omar Samad, an ex-Afghan ambassador to Canada and France, stated that the Taliban realize they don’t have the expertise needed. They are reaching out to technocrats as well as renowned Afghans. They are aware that they will need non-Taliban leaders in their government."
According to The New York Times, Ajmal Ahmady, former acting governor of Afghanistan's central bank, stated last week that the Federal Reserve Bank of New York holds a stash of approximately $7 billion of its reserves.
Ahmady stated previously on Twitter that "as per international standards most assets are held in safe and liquid assets such as Treasuries or gold."
Insider was not able to confirm the $7B figure by a spokesperson for the Federal Reserve Bank of New York. She stated in an email Wednesday that "as a matter of principle, we do not acknowledge nor discuss individual account holders."
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Ahmady said that $1.3 billion of Afghanistan’s central bank’s reserves were held in international accounts. Some of this is in Euros and British Pounds, while the rest is in the Bank for International Settlements, based in Switzerland.
The President Joe Biden has frozen most of Afghanistan's central banks assets, leaving the Taliban with very little cash and facing a financial crisis.
"We can tell that the Taliban have access to 0.1-0.2% of Afghanistan’s international reserves. Ahmady tweeted, "Not much", and warned of sharp inflation as well as a decline in the value of the national currency.
An anonymous Biden administration official stated last week that any Central Bank assets held by the Afghan government in the United States would not be available to the Taliban.
Boris Johnson, the UK Prime Minister, stated Tuesday that the west has "huge leverage" in getting the Taliban to let Afghans leave Afghanistan even though the August 31 deadline for evacution by the Biden administration has passed. This includes withholding significant funds.
Johnson stated that the number one condition they are setting as G7 was that they have to guarantee safe passage for all who wish to leave after an emergency virtual meeting of G7 leaders.
The prime minister stated that while some will not accept it, others will. "The G7 has a lot of leverage, both economic and diplomatic, which I hope they will understand."
Johnson said, "What are we saying is Afghanistan cannot lurch back to becoming a breeding ground for terror, Afghanistan cannot become a Narco-state, girls need to be educated until the age of 18.
According to the Taliban, the US must complete its Afghan evacuation by August 31, and will not allow extensions.
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