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Afghanistan Central Banker Flees, Currency Plummets Amid Turmoil


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Afghanistan Central Banker Flees, Currency Plummets Amid Turmoil

 

Kartik Goyal and Rahul Satija
Tue, August 17, 2021, 11:15 AM·2 min read
 
3d67edda120a00515c5de20aec850e91
 

Afghanistan Central Banker Flees, Currency Plummets Amid Turmoil

(Bloomberg) -- Afghanistan’s central bank acting governor departed the country as Taliban fighters took control of the capital, with the rising political turmoil pushing the nation’s currency to a record low.

The Afghani fell 1.7% Tuesday to 83.5013 per dollar, a fourth day of decline, according to data compiled by Bloomberg. The central bank was told there would be no more dollar shipments on Friday, which curtailed its ability to supply currency and led to more panic, Acting Governor Ajmal Ahmady wrote in a Twitter thread.

Ahmady got on a military plane at the airport where thousands sought to leave as the Taliban’s rapid territorial advance led to the collapse of the government. There was no evacuation plan, and President Ashraf Ghani’s departure without creating a transitional government contributed to the chaos, Ahmady wrote.

 

“Currency spiked from a stable 81 to almost 100 then back to 86,” the central banker wrote. “I held meetings on Saturday to reassure banks and money exchangers to calm them down.”

On Sunday, the governor left the central bank and went to the airport where he saw other government leaders. More than 300 passengers were packed into his flight, though it had no fuel or pilot, he wrote.

“It did not have to end this way. I am disgusted by the lack of any planning by Afghan leadership,” he wrote.

Read: U.S., Taliban in Talks to End Airport Chaos: Afghanistan Update

The turmoil in Afghanistan spilled over into markets in Pakistan.

Sovereign dollar bonds due 2031 for Pakistan dropped 1.8 cents on Monday, the biggest decline since the government priced the notes in March. Pakistani dollar bonds were the biggest losers in Asia on Monday, according to a Bloomberg Barclays index. The notes rose 0.2 cents on the dollar on Tuesday to 100.5 cents.

Investors are concerned over any impact on law and order in Pakistan, and whether “global forces will try to isolate Pakistan” due to its alleged support of the Taliban, said Abdul Kadir Hussain, the head of fixed-income asset management at Dubai-based Arqaam Capital.

More stories like this are available on bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.

 

link  :  https://finance.yahoo.com/news/afghanistan-central-banker-flees-currency-041538941.html?fr=sycsrp_catchall

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Trading in Afghan currency resumes after early halt following Taliban takeover

Tuesday, Aug 17, 2021
 
KARACHI: The Afghani currency breathed a sigh of relief on Monday, as its trading resumed after being halted following concerns about the long-term impact of the Taliban takeover of Afghanistan.

“Trading in the Afghani currency was stopped for two days but it resumed in the second session and the selling rate for the Afghani currency was 2, compared with 1.70 last week,” said Malik Bostan, the chairman of the Exchange Companies Association of Pakistan.

“The demand for the Afghan Afghani rose, giving confidence to traders about the prospects of peace and stability in Afghanistan as many nations have expressed willingness to support the country’s reconstruction,” he added.

However, still, there's a high level of uncertainty about the future of the neighbouring currency as dealers were concerned whether the world would recognise the Taliban government or not. Analysts are trying to predict the economic spill over in Pakistan.

The rupee is likely to face depreciatory pressure due to rising demand of US dollar in Afghanistan in the wake of change of political setup in Kabul, as practices suggest traders used to freely move foreign currencies across two sides of the Durand Line.

“A lot of trading in Afghanistan is now denominated in Pak rupee, but there is a huge demand for US dollars as well. It is certain that material amounts of foreign currency are being smuggled across the border, putting some pressure on the rupee,” said Komal Mansoor, an analyst at Tresmark, an application that tracks financial markets.

“Not only is the rupee and dollar in demand, any currency the locals can get their hands on is mopped up, especially the Turkish Lira, Euro and even the Iranian riyal,” Mansoor said.

With the US abandoning Afghanistan, dollar inflow will obviously ebb and a lot of basic commodities will become scarce. This will be somewhat circumvented by smuggling across the border, which Pakistan will have to shoulder and as a consequence, the rupee will feel the heat, said another analyst Faisal Mamsa.

The most significant development affecting Pakistan's economy in recentyears is improvement in security conditions. This led to more favourable travel advisories by foreign governments, including the US recently, and would be a boon to Pakistan's exports.

Ehsan A Malik, the CEO at The Pakistan Business Council said spill over of turmoil from Afghanistan is a concern. Safety and security of people and movement of goods are equally essential for domestic trade.

“We are seeing green shoots in the economy that are mostly in domestic consumption - autos, cement, iron and steel, food and beverages. Market disruption due to closures will be detrimental. Also, the recent upsurge in exports is mainly because of diversion from alternative supply sources affected by Covid - Bangladesh, and India,” he said. The mass influx of refugees from Afghanistan may challenge our efforts to contain the pandemic.

Whilst deterioration in security conditions would affect both domestic consumption and exports, the likelihood of this is low. The centres of production, consumption, and international trade in Pakistan are far from the Afghan border and our security forces now have greater capability of containing and dealing with fallouts, Malik said.

Businesses in Pakistan are resilient, thanks to the volatile, uncertain, complex and ambiguous conditions in which they have been operating for years. There will be some positive impact too, he added.

Misuse of the Afghan transit trade treaty and dumping of duty/tax evaded goods should decline in the near-term. Once things start settling down in Afghanistan there should be opportunities for Pakistani businesses to engage in reconstruction there, subject of course to availability of funds. China has offered to assist.

Integrating Afghanistan into China-Pakistan Economic Corridor (CPEC) and opening up the routes to Central Asia offers a major medium-term opportunity. Pakistan's economic diplomacy should focus on gaining improved tariffs for joint Afghan/Pakistan-produced goods from countries eager to see peace return to this part of the world. These could also be contingent on defined gender and environment objectives to address the concerns of the international community. “Businesses may take a risk management approach in the short-term but should be ready to avail the opportunities that lie ahead,” Malik added.

 

link  :  https://www.thenews.com.pk/print/879173-trading-in-afghan-currency-resumes-after-early-halt-following-taliban-takeover

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As Afghanistan’s central bank governor flees, currency drops

 
 

The turmoil spills into Pakistan’s markets as investors worry it will be isolated in its alleged support of the Taliban.

By Kartik Goyal and Rahul SatijaBloomberg

Afghanistan’s central bank acting governor departed the country as Taliban fighters took control of the capital, with the rising political turmoil pushing the nation’s currency to a record low.

The Afghani fell 1.7% Tuesday to 83.5013 per dollar, a fourth day of decline, according to data compiled by Bloomberg. The central bank was told there would be no more dollar shipments on Friday, which curtailed its ability to supply currency and led to more panic, Acting Governor Ajmal Ahmady wrote in a Twitter thread.

Ahmady got on a military plane at the airport where thousands sought to leave as the Taliban’s rapid territorial advance led to the collapse of the government. There was no evacuation plan, and President Ashraf Ghani’s departure without creating a transitional government contributed to the chaos, Ahmady wrote.

“Currency spiked from a stable 81 to almost 100 then back to 86,” the central banker wrote. “I held meetings on Saturday to reassure banks and money exchangers to calm them down.”

On Sunday, the governor left the central bank and went to the airport where he saw other government leaders. More than 300 passengers were packed into his flight, though it had no fuel or pilot, he wrote.

“It did not have to end this way. I am disgusted by the lack of any planning by Afghan leadership,” he wrote.

 

377491451.jpg?ssl=1&is-pending-load=1

 

The turmoil in Afghanistan spilled over into markets in Pakistan.

Sovereign dollar bonds due 2031 for Pakistan dropped 1.8 cents on Monday, the biggest decline since the government priced the notes in March. Pakistani dollar bonds were the biggest losers in Asia on Monday, according to a Bloomberg Barclays index. The notes rose 0.2 cents on the dollar on Tuesday to 100.5 cents.

Investors are concerned over any impact on law and order in Pakistan, and whether “global forces will try to isolate Pakistan” due to its alleged support of the Taliban, said Abdul Kadir Hussain, the head of fixed-income asset management at Dubai-based Arqaam Capital.

 

link  :  https://readerstown.com/2021/08/17/as-afghanistans-central-bank-governor-flees-currency-drops/

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SALE, PURCHASE OF AFGHAN CURRENCY ‘BANNED’ IN PAKISTAN

 

 

 AUGUST 16, 2021

 

KARACHI: A ban has been imposed on the sale and purchase of Afghan currency in Pakistan after the developing situation in Afghanistan that saw the Taliban taking over the capital city of Kabul, ARY NEWS reported on Monday.

There will be a complete ban on the sale and purchase of Afghan currency in the wake of the ongoing developing situation, the forex association said.

The announcement came after President Ashraf Ghani fled the country on Sunday as the Taliban entered the capital city, saying he wanted to avoid bloodshed, while hundreds of Afghans were desperate to leave flooded Kabul airport.

 

The Taliban declared the war in Afghanistan was over after they took control of the presidential palace in Kabul as US-led forces departed and Western nations scrambled on Monday to evacuate their citizens.

It took the Taliban just over a week to seize control of the country after a lightning sweep that ended in Kabul as Afghan forces, trained for years and equipped by the United States and others at a cost of billions of dollars, melted away.

A US State Department spokesperson said early on Monday that all embassy personnel, including Ambassador Ross Wilson, had been transferred to Kabul airport to await evacuation and the American flag had been lowered and removed from the embassy compound.

Hundreds of Afghans invaded the airport’s runways in the dark, pulling luggage and jostling for a place on one of the last commercial flights to leave the country before US forces took over air traffic control on Sunday.

 

link  :  https://arynews.tv/afghan-currency-sale-purchase-pakistan/

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Afghan currency crashes amid turmoil as central bank chief flees Kabul

17 Aug, 2021 07:58
Afghan currency crashes amid turmoil as central bank chief flees Kabul
 
Afghanistan’s national currency, the afghani, continued to plummet on Tuesday as Taliban fighters took control over the capital city of Kabul. The head of the country’s central bank, Ajmal Ahmady, has fled the country.

According to messages left by the governor in a Twitter thread, the central bank was told there would be no more dollar supplies, which cut the regulator’s ability to bolster national currency, spreading more panic across the country.

The afghani dropped 1.7% on Tuesday to 83.5013 against the US dollar, marking the fourth day of decline, according to data tracked by Bloomberg.

“Currency spiked from a stable 81 to almost 100 then back to 86. I held meetings on Saturday to reassure banks and money exchangers to calm them down,” Ahmady wrote.

The political turmoil that swept Afghanistan over the weekend has spread to markets in neighboring Pakistan, where sovereign dollar bonds due in 2031 fell 1.8 cents on Monday, demonstrating the largest drop since pricing in March. Meanwhile, Pakistani dollar bonds reportedly suffered the biggest losses in Asia on Monday. The securities grew by 0.2 cents on the dollar on Tuesday to 100.5 cents.

Taliban forces entered Kabul on August 15 days after US President Joe Biden announced that all American forces would leave the country by September 11, the 20th anniversary of a series of terrorist attacks against the US.

The takeover of the Afghan capital was preceded by years of tensions and attacks by the Taliban – listed as a prohibited terrorist organization in Russia.

 

link  :  https://www.rt.com/business/532252-central-bank-flee-afghani-plummets/

 
 
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6 hours ago, 3 bucks new rv rate said:

the rate right now is 1 USD : 83.5 AFB and then, 1 AFN=0.012 USD. If i say if the rate increase by 10 times only, then the rate is going to be 1 AFN= 12 cents. it is higher than IQD at the current rate now.

1 USD=83.5 AFN and then, 1 AFN=0.012 USD.  1 USD=1,460 IQD, and then 1 IQD=0.00068 USD. Makes me wonder why does the afghanistan's currency is higher than the Iraqi's currency? Between country of Afghanistan and country of Iraq, which country has had the most resources of oil reserves?

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Something very fishy here! What kind of assets does Afghanistan have besides DOPE? They are in the middle of a 20 year war. They are full of crooked politicians and a unstable security situation to boot, but their currency was worth $1.70 to each USD!!!! On the other hand Iraq has the 3rd largest oil and natural gas supplies in the world! The Iraq dinar is almost worthless for about 20 years now!!! How can this be???? Something is not right here folks! Someone is playing us for major fools!! JMHO 

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2 hours ago, Artitech said:

What kind of assets does Afghanistan have besides DOPE?

$1 Trillion Trove of Rare Minerals Revealed Under Afghanistan

Despite being one of the poorest nations in the world, Afghanistan may be sitting on one of the richest troves of minerals in the world, valued at nearly $1 trillion, according to U.S. scientists.

https://www.livescience.com/47682-rare-earth-minerals-found-under-afghanistan.html

also

https://www.nbcnews.com/science/science-news/rare-earth-afghanistan-sits-1-trillion-minerals-n196861

 

The CCP loves the tallie-bon and has recognized them as the leaders of the country.

 

The ccp will clean house on the rare minerals and get their dope too.

 

One stop shop...

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3 hours ago, Artitech said:

Something very fishy here! What kind of assets does Afghanistan have besides DOPE? They are in the middle of a 20 year war. They are full of crooked politicians and a unstable security situation to boot, but their currency was worth $1.70 to each USD!!!! On the other hand Iraq has the 3rd largest oil and natural gas supplies in the world! The Iraq dinar is almost worthless for about 20 years now!!! How can this be???? Something is not right here folks! Someone is playing us for major fools!! JMHO 

China...China is backing and supporting all of this >taliban and  dimentia Joe ...Afganistan is is rich in raw minerals n junk  China just scored land , minerals our weapons,computers with secret intelligence and the list goes on>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

 

 

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2 hours ago, bigwave said:

$1 Trillion Trove of Rare Minerals Revealed Under Afghanistan

Despite being one of the poorest nations in the world, Afghanistan may be sitting on one of the richest troves of minerals in the world, valued at nearly $1 trillion, according to U.S. scientists.

https://www.livescience.com/47682-rare-earth-minerals-found-under-afghanistan.html

also

https://www.nbcnews.com/science/science-news/rare-earth-afghanistan-sits-1-trillion-minerals-n196861

 

The CCP loves the tallie-bon and has recognized them as the leaders of the country.

 

The ccp will clean house on the rare minerals and get their dope too.

 

One stop shop...

You nailed it…. We’ve been sold out long ago 

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Treasure of a trillion dollars in the territory of Afghanistan and the largest reserves in the world
 08/19/2021
 
 1900
Follow up / supplier news

 

Afghanistan is considered one of the poorest countries in the world, but US officials revealed in 2010 that this country may be sitting on a treasure trove of precious metals worth more than a trillion dollars.

US media reported that contrary to the stereotype, according to which some believe that Afghanistan is a chain of mountains and rugged expanses, its lands hold huge wealth, and perhaps the Taliban will be able to exploit these huge deposits of minerals, which are necessary to build the global clean energy economy .

The American "Quartz" website mentioned that in 2010, the US Department of Defense issued an internal memo called "Afghanistan .. Saudi Arabia in Lithium", after American geologists discovered huge deposits of this mineral in the country, valued at at least 1 trillion dollars. . It is especially necessary for electric vehicles and renewable energy batteries. This treasure could dramatically change Afghanistan's economic prospects.

Other important minerals such as iron, copper, cobalt and gold are also scattered throughout the country.

According to the International Energy Agency, global demand for lithium is expected to rise 40 times above 2020 levels by 2040, so the world's shift to clean energy could bring huge profits to Afghanistan.

"The Taliban are now sitting on top of some of the world's most important strategic minerals," says Rod Schoonover, head of the environmental security program at the Strategic Risk Council, a Washington think tank.

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17 hours ago, yota691 said:

Treasure of a trillion dollars in the territory of Afghanistan and the largest reserves in the world
 08/19/2021
 
 1900
Follow up / supplier news

 

Afghanistan is considered one of the poorest countries in the world, but US officials revealed in 2010 that this country may be sitting on a treasure trove of precious metals worth more than a trillion dollars.

US media reported that contrary to the stereotype, according to which some believe that Afghanistan is a chain of mountains and rugged expanses, its lands hold huge wealth, and perhaps the Taliban will be able to exploit these huge deposits of minerals, which are necessary to build the global clean energy economy .

The American "Quartz" website mentioned that in 2010, the US Department of Defense issued an internal memo called "Afghanistan .. Saudi Arabia in Lithium", after American geologists discovered huge deposits of this mineral in the country, valued at at least 1 trillion dollars. . It is especially necessary for electric vehicles and renewable energy batteries. This treasure could dramatically change Afghanistan's economic prospects.

Other important minerals such as iron, copper, cobalt and gold are also scattered throughout the country.

According to the International Energy Agency, global demand for lithium is expected to rise 40 times above 2020 levels by 2040, so the world's shift to clean energy could bring huge profits to Afghanistan.

"The Taliban are now sitting on top of some of the world's most important strategic minerals," says Rod Schoonover, head of the environmental security program at the Strategic Risk Council, a Washington think tank.

Well I guess we know now what that dope head hunter Biden sold China, for basically pennies on the dollar! That is just what dope heads do. They steal something valuable, then go to the pawnshop with it! They sell it for pennies on the dollar! The Chinese were hunter’s pawnshop! The sad part about all of this, America can never undo the damage that crooked Joe and his no good son has done to our country!! JMHO 

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There are EPIC FUBARS throughout History..... the Biden Administration’s handling of Afghanistan is a stand alone example of what grossly incompetent clueless politicians who have the WORST record of Foreign Affairs ever in the history of the USA, show the entire world what a mob of true morons can do when they put their brain dead minds to it.


Worse still, is the complicit Media spinning the glowing narrative of the great job Mentally Bonkers Joe & his clown bus full of fools is doing.

 

You can’t hide this one. Too many Global news agencies have scrambled to cover this not to mention the personal phone videos out there.

 

For all you brain washed Lefties that think I’m a hater ... first of all I don’t care about your feelings. Secondly, Why don’t you go to Afghanistan & tell some Taliban you’re an American as you show them your passport—no doubt they’ll welcome you with open arms - after all, they’re just misunderstood huh.

Hope your Will is in order.

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9 hours ago, horsesoldier said:

There are EPIC FUBARS throughout History..... the Biden Administration’s handling of Afghanistan is a stand alone example of what grossly incompetent clueless politicians who have the WORST record of Foreign Affairs ever in the history of the USA, show the entire world what a mob of true morons can do when they put their brain dead minds to it.

💥💥💥💥BOOM💥💥💥💥

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 London: agencies
 
British Prime Minister Boris Johnson called on the leaders of the Group of Seven to hold urgent talks tomorrow, Tuesday, to discuss the situation in Afghanistan, stressing the importance of international cooperation to ensure safe evacuations from there and prevent a humanitarian crisis for the Afghan people.
The British Prime Minister, whose country currently holds the rotating presidency of the Group of Seven (Germany, Canada, the United States, France, Italy, Japan and Britain), was keen to invite those countries to hold a summit for this group to discuss the situation in Afghanistan after it fell into the hands of the Taliban.
Meanwhile, former US President Donald Trump launched an attack on President Joe Biden's handling of the withdrawal of US forces from Afghanistan, which he described as America's "greatest foreign policy humiliation."
"Biden's failed withdrawal from Afghanistan is the most astonishing form of gross incompetence by a president, perhaps ever," Trump told a rally of his supporters near Coleman, Alabama.
Trump, a Republican, has repeatedly blamed Democrat Biden for the fall of Afghanistan to the hard-line Taliban, even though the US withdrawal that caused the collapse was negotiated before the Biden administration took office.
For his part, Biden criticized the Afghan army for refusing to fight, condemned the ousted Afghan government, and declared that he "inherited a bad withdrawal agreement from Trump."
The most prominent event on the Afghan scene at the present time is the state of chaos at Kabul airport caused by the fumbled western evacuations, and Afghan media reported the closure of the airport for two days in order to evacuate the people currently in its territory.
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Exiled Afghan Central Bank Chief Warns Taliban Will Wreck Economy — But Will Crypto Keep The Regime Afloat?

 

Phil Hall
Tue, August 24, 2021, 1:29 AM
 
346d909d5b4ac228d7ec22ccf1869577
 

The exiled head of Afghanistan’s central bank has warned the Taliban will plunge the nation into a financial miasma as frozen assets and an already-weak local currency will create a new wave of monetary hardships.

What Happened: In an interview with Bloomberg, Ajmal Ahmady, governor of Da Afghan Bank, observed the majority of the central bank’s more than $9 billion in assets were frozen by the U.S. following the fall of Kabul to Taliban forces.

Speaking from an undisclosed location outside of Afghanistan, Ahmady said the country was already dealing with the COVID-19 crisis and a regional drought before the Taliban took power, and the displacement of people and new domestic uncertainties created by their regime will only exacerbate problems.

 

Last week, the International Monetary Fund said the Taliban has been prevented from accessing reserve assets worth about $500 million. Afghanistan functions primarily as a cash economy, but the Afghani, the nation's currency, is not accepted for cross-border trade, while an informal transfer system known as hawala doesn’t function efficiently in a modern financial environment.

Ahamdy predicted the Taliban will “probably try to go out to other countries to replace the U.S., and maybe China, Pakistan, or other regional countries to find some sources of finance, but it’s a tough situation.”

What Else Is Happening: CNBC reported that Afghanistan is suffering from a cash shortage due to runs on banks and a fraying currency, which is quickly driving up the price of consumer goods. Overseas funds transfers via The Western Union Company (NYSE: WU) have been suspended and the absence of central bank leadership leaves the country without a fiscal policy.

However, one option for the Taliban's financial wellness could come through cryptocurrency.

The blockchain data firm Chainalysis ranked Afghanistan as 20th out of the 154 countries for overall cryptocurrency adoption. Last year, Afghanistan didn’t rank at all due to a near-nonexistent cryptocurrency presence.
It is unclear if the Taliban is using cryptocurrency, but the digital asset could be a way for it circumvent financial sanctions from the world community. North Korea, which has been the subject of sanctions for years, has reportedly relied on cryptocurrency to bypass global restrictions placed on its economy and has been accused of hacking cryptocurrency exchanges to gain more digital assets.

 

link  :  https://finance.yahoo.com/news/exiled-afghan-central-bank-chief-182937230.html?fr=sycsrp_catchall

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As Afghanistan’s central bank governor flees, currency drops

Eric Martin
Tue, August 24, 2021, 1:09 AM

(Bloomberg) -- Afghanistan’s new Taliban-led government faces a series of shocks that probably will lead to a weaker currency, faster inflation and capital controls, according to the nation’s exiled central bank chief.

The Afghani, as the tender is known, likely will see renewed weakness after it reached a record low last week, Ajmal Ahmady, governor of Da Afghanistan Bank, known as DAB, said in an interview for Bloomberg’s Odd Lots podcast. That could spur a pickup in consumer-price increases by making imports more expensive, he said.

With the vast majority of the central bank’s more than $9 billion in assets frozen by the U.S., Afghanistan faces a potential economic crisis, Ahmady said. That comes on top of Covid-19, a regional drought and displaced people that was already creating hardship.

“It’s a really challenging situation,” Ahmady said by phone from an undisclosed location where he fled as the government fell. “We were trying to manage three shocks, and now I think they’re gonna have to deal with a fourth.”

Ahmady, 43, is a Harvard University graduate who briefly worked at the U.S. Treasury Department as an economist.

As the U.S. prepares to complete the military withdrawal that led President Ashraf Ghani to flee to the United Arab Emirates as the Taliban rolled into Kabul, Afghanistan’s economy and banking sector lie in tatters. Almost three-quarters of the country’s nearly 40 million citizens live in rural areas, while a majority of lenders are in the three major cities, according to World Bank data.

The Afghan currency isn’t accepted for cross-border trade, leaving the nation dependent on U.S. dollars and an informal transfer system known as hawala. The centuries-old trust-based method of moving cash that underpinned international trade throughout the Middle East and South Asia before the advent of modern banking remains a central part of life in Afghanistan.

 

The International Monetary Fund last week said that the new government is cut off from using fund reserve assets set to be allocated to its 190 member nations on Monday, depriving the Taliban of almost $500 million.

The Taliban will “probably try to go out to other countries to replace the U.S., and maybe China, Pakistan, or other regional countries to find some sources of finance,” Ahmady said. “But it’s a tough situation.”

Ahmady said that he thinks the people of Afghanistan are very disappointed in the U.S. and the nation’s willingness to negotiate a deal with the Taliban. The deal that the Trump administration reached in Doha, without the participation of Afghanistan’s government, gave the Taliban legitimacy, was the wrong approach and paved the way for the group’s return to power, he said.

“It would have been better for the U.S. to simply have left and said, ‘We are no longer here, we leave, and we are removing our troops,’” Ahmady said. “Instead, there was an agreement that was pursued and signed in which they discredited the Afghan government, in which they came and forced the Afghan government to release 5,000 prisoners, some of whom were Taliban, some were murderers, some of whom were major drug dealers.”

 

link  :  https://finance.yahoo.com/news/afghan-central-banker-sees-currency-210025322.html

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Afghanistan’s economic crisis worsened with currency depreciation and foreign aid stopped after the Taliban took over

lalitsethi4 days ago
afghani-162945822216x9.jpg
 

One of the poorest countries in the world, the country is now facing a downward spiral economy as Taliban fighters occupy the capital Kabul on Sunday and the 20-year war in Afghanistan ends surprisingly quickly. increase. In just 10 days, the Taliban occupied cities one after another without resistance following the withdrawal of Western troops. However, lacking support system" rel="">support from global society, most countries have withdrawn their financial assistance and suspended development projects in Afghanistan.

The Taliban promised to improve Afghanistan’s economy, but to do so, the new regime would have to rely primarily on foreign aid, which some global donors stopped helping. It is difficult to realize to do so. The Washington-based crisis lender IMF said Wednesday that it had decided to withhold support system" rel="">support for Afghanistan amid uncertainties about Kabul’s leadership position.

The Afghan economy was already hit during the Covid-19 pandemic, and the Taliban hijacking caused the currency to fall sharply.

Description: Why the war never ends for Afghanistan when the new Northern Alliance forms against the Taliban


 
No access to Afghanistan reserves in the US:
The Taliban may have little money available other than cash on hand. The Taliban will lose access to most of the country’s cash and gold inventories.The Taliban will lose access to most of the country’s cash and gold stocks

The majority are in the United States, and President Joe Biden’s administration said the Taliban had no access to them. Western Union has also announced that it will temporarily suspend wire transfers to the country. This is another important source of cash for the public.

According to Ahmaddy, the US Federal Reserve holds $ 7 billion in reserves, including $ 1.2 billion, with the rest in foreign accounts, including the Bank for International Settlements based in Basel.


 
According to the latest World Bank estimates from May, international remittance flows to Afghanistan were estimated at $ 789 million in 2020.

 

The Taliban faces a significant need for international aid:
Some major global donors have helped one of the poorest countries in the world, including the IMF, which announced on Wednesday that it would freeze aid to the country in the face of uncertainty about government approval. It has stopped. The World Bank could follow suit.

“Afghanistan relies heavily on foreign aid, which is about ten times or more than what the Taliban could get from its own funds,” he said.

International financial assistance and access to the International Economic Fund are crucial to the economy of Afghanistan. According to World Bank data, aid flows in 2020 accounted for 42.9 percent of Afghanistan’s $ 19.8 billion GDP.

 

International response to the Taliban:
The reception received by the group following the shocking takeover of the capital Kabul looks more modest than during the first stint of power.

Russia, China and Turkey all welcome the first official statements of the armed groups. However, many donor countries, including the United States, are wary. Washington argues that the Taliban expects to respect human rights, including those of women.

Canada’s Prime Minister Justin Trudeau said his country had “no plans” to approve the Taliban. Germany announced the suspension of development assistance on Monday. Berlin was scheduled to provide € 430 million ($ 53.1 million) in aid this year, including € 250 million. ($ 292.5 million) For development.

It is not clear whether China, the world’s second-largest economy, will fill the void if its relations with Western nations remain cold.

The IMF also announced that it would suspend aid to Afghanistan. This assistance included access to an existing $ 370 million lending program and reserves in the form of special drawing rights (SDRs), a basket of lenders’ currencies. According to Afghanistan, the IMF will distribute a $ 650 billion SDR to all eligible members on August 23, of which Afghanistan’s share is estimated at about $ 340 million.

In June, the IMF announced the latest installment payment of a $ 370 million loan to Afghanistan, which was approved in November, with the aim of supporting the economy in the Covid-19 pandemic.

The World Bank has more than 20 development projects underway in the country and has provided $ 5.3 billion primarily in grants since 2002.

The status of these programs is unknown as development lenders are working to pull staff abroad.

 

Afghan currency plunge on Taliban acquisition:
Afghanistan’s currency fell after the Taliban returned to power and urged the central bank governor to flee. Tuesday’s unit sank to 86 Afghani per dollar, down 6% from 80 Afghani per dollar last Friday.

Afghanistan’s central bank governor, Ajmal Ahmady, said Monday that it stopped delivering dollars last Friday. By that time, the Afghan currency was relatively stable despite the progress of the Taliban’s lightning bolts. Following news of President Ashraf Ghani’s resignation, Ashmady left Kabul Airport on a military plane Sunday night.

Read again | “There was no radical view”: A military veteran recalled his 1982 batchmate “Shell” and is now the top Taliban leader.

 

1 in 3 Afghans at risk of severe or acute hunger: WFP
The United Nations World Food Program says that one-third of Afghanistan’s population, or 14 million, is at risk of serious or acute hunger due to the combined effects of war and drought associated with global warming. I warned you. “2021 is a very difficult year for Afghanistan,” AFP quoted WFP representative and country director Mary Ellen McGroarty.

She said the war-torn country is facing a second severe drought in three years, in addition to fighting and evacuating people. Wheat production has declined by 40% after one of the driest periods of almost 30 years. “It also had a devastating effect on livestock,” McGroarty explained.

“Farmers are unable to harvest land and are fleeing their homes because of the growing conflict nationwide,” she said. Orchards have been destroyed in some areas, along with private infrastructure such as bridges, dams and roads. ..

The combined effects of the drought conflict have led to higher food prices. Wheat bags are priced 24 percent higher than the five-year average today.

 

Opium and taxes:
According to a May 2020 report from the UN Security Council Sanctions Committee, the Taliban earns a lot of money from criminal activities such as growing poppies used to make heroin and opium, and drug trafficking. ..

The group’s annual revenue is estimated to be between $ 300 million and $ 1.5 billion, and ransoms from corporate blackmail and kidnapping also generate revenue. The Taliban are experts in taxing almost every area they control, from government projects to commodities.

The international community has spent billions of dollars helping Afghanistan eradicate poppy cultivation, yet the country still produces more than 80 percent of the world’s opium. The industry employs hundreds of thousands of people in countries with high unemployment after 40 years of conflict.

The Taliban admits that the situation cannot be improved without foreign assistance. “We talked to many countries. We want them to work on our economy. Taliban spokesman Zabifra Mujahid said on Tuesday, but since 1996. The group said it would ban the production of opium, as it did when it ruled the country in 2001.

 

link  :  https://indianewsrepublic.com/afghanistans-economic-crisis-worsened-with-currency-depreciation-and-foreign-aid-stopped-after-the-taliban-took-over/426711/

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What will happen to Afghanistan’s economy under Taliban rule?

The largest-ever allocation of the International Monetary Fund’s Special Drawing Rights is set to go into effect Monday, including an estimated $460m in SDRs for Afghanistan, but the Taliban is currently blocked from accessing it.

Despite controlling the government, the Taliban has little access to Afghanistan's central bank reserves that are held abroad [File: Rahmat Gul/AP Photo]

Despite controlling the government, the Taliban has little access to Afghanistan's central bank reserves that are held abroad [File: Rahmat Gul/AP Photo]
19 Aug 2021

Afghanistan is set to receive nearly half a billion dollars from the International Monetary Fund (IMF) next week, but it’s unlikely the Taliban will be able to touch any of it.

The largest-ever allocation of IMF Special Drawing Rights (SDRs), equivalent to $650bn, is set to go into effect Monday, including an estimated $460m in SDRs for Afghanistan. But the IMF has pressed pause on letting the Taliban exchange the SDRs for hard currency. Instead, Afghanistan joins countries like Myanmar and Venezuela who receive IMF assets but can’t utilise them.

“As is always the case, the IMF is guided by the views of the international community,” IMF spokesperson Gerry Rice said in a statement Wednesday. “There is currently a lack of clarity within the international community regarding recognition of a government in Afghanistan, as a consequence of which the country cannot access the Special Drawing Rights (SDRs) or other IMF resources.”

Earlier this week, 18 members of the United States Congress urged US Treasury Secretary Janet Yellen in a letter (PDF) to make sure that “nearly half a billion dollars in unconditional liquidity” does not go “to a regime with a history of supporting terrorist actions against the United States and her allies”.

It’s just the latest development in efforts to keep Afghanistan’s assets out of Taliban hands. So what money does the group have access to, and what is the state of the Afghan economy? Here’s what you need to know.

What was the status of the Afghan economy before the Taliban took over?

Struggling. The country’s economy is “shaped by fragility and aid dependence,” according to the World Bank, with 75 percent of public spending funded by grants.

That aid was already set to decrease by around 20 percent from 2016-2020 levels this year after “several major donors provided only single-year pledges” during the 2020 Afghanistan Conference, “with future support made conditional upon the government achieving accelerated progress in efforts to combat corruption, reduce poverty, and advance ongoing peace talks,” the World Bank said.

Now, with the Taliban in charge, it’s uncertain whether any of those conditions will be met, potentially further reducing the foreign aid the country relies on — including in the form of SDRs.

What is an SDR, exactly?

An SDR is an international reserve asset created by the IMF from a basket of currencies including the US dollar, Japanese yen, Chinese yuan, the euro and the British pound.

While not an official currency itself, the SDR is like an artificial currency that IMF member states can exchange for freely usable hard currencies like US dollars.

Countries can exchange their SDRs for those freely usable currencies at a fixed exchange rate, which changes daily and is posted on the IMF’s website.

How many SDRs does Afghanistan currently have?

Just over 37 million, which is equivalent to about $52.5m, according to the latest SDR exchange rate. Monday’s allocation, however, will boost that number to 323.8 million SDRs, or just under $460m, according to the IMF.

What other assets does Afghanistan have?

Da Afghanistan Bank (DAB) – the country’s central bank – listed 784.6 billion afghanis ($10bn) in assets for the period ending June 21, according to its bank statement (PDF), including 102.7 billion ($1.3bn) in gold and 28.7 billion ($366m) in foreign currency cash reserves.

Are all of those assets held in Afghanistan?

No. Like many developing countries, Afghanistan holds some of its assets overseas, including in the US, where the Taliban is the subject of economic sanctions.

For example, the country had more than 101 billion afghanis ($1.3bn) worth of gold stored at the Federal Reserve Bank of New York at the end of 2020, according to an independent auditor’s report (PDF) prepared at the end of last year.

DAB’s acting governor, Ajmal Ahmady, tweeted a breakdown Wednesday of where the bank’s major reserves are held, confirming $7bn are with the US Federal Reserve, including $1.2bn in gold.

So what happened to the money the Afghan central bank has in the US?

It’s currently frozen. The US confirmed it froze $9.5bn in assets DAB has in accounts with the Federal Reserve and other American financial institutions to keep the Taliban from accessing them.

Before Kabul fell, the US had also stopped shipments of dollars to the country, Ahmady tweeted as he fled the country earlier this week.

So can the Taliban access any of the central bank’s funds abroad?

Probably only a small amount. In a tweet Wednesday, Ahmady estimated “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,” he added.

What about assets held in Afghanistan?

The 2020 auditor’s report on the country’s central bank showed there were 12.5 million afghanis ($159,600) worth of gold bars and silver coins held in the bank’s vault inside Afghanistan’s presidential palace, which the Taliban now controls.

Also in the hands of the Taliban are around $362m in foreign currency cash holdings, which “consist almost entirely of US dollars and were held at the bank’s head offices and branches as well as the presidential palace,” Reuters news agency reported.

Does the Taliban have other sources of funds?

Yes — but not all of them are legal.

The Taliban has always relied on criminal activities to fund itself, “including drug trafficking and opium poppy production, extortion, kidnapping for ransom, mineral exploitation and revenues from tax collection in areas under Taliban control or influence”, according to a United Nations Security Council report published in June.

How much income does the Taliban itself have?

That’s a tough question to answer exactly, but the UN Security Council report estimates the group has an annual income of between $300m and $1.6bn annually.

The UN noted that “external financial support, including donations from wealthy individuals and a network of non-governmental charitable foundations, also account for a significant part of Taliban income.”

The group has also sought to exploit Afghanistan’s mineral wealth, and the UN reports that “profits from the mining sector earned the Taliban approximately $464 million” in 2020.

AP21227475770726.jpg?w=770&resize=770%2C516

Afghans waited in long lines for hours to try to withdraw money in Kabul, Afghanistan on Sunday after the Taliban entered the city and took over the government [File: Rahmat Gul/AP Photo]

Where does the current economic situation leave the Afghan people?

In an increasingly precarious position. More than 47 percent of the country already lived below the poverty line in 2020, according to data from the Asian Development Bank, and 34.3 percent of people with jobs live on less than $1.90 per day.

Most households rely on the low-productivity agriculture sector for their income, and security issues, corruption and political instability have all held back private-sector development, leading Afghanistan to rank 173rd out of 190 countries in the World Bank’s 2020 Doing Business Survey.

Unemployment stood at 11.7 percent in 2020 pre-Taliban rule, before people began fleeing the country and some women were dismissed from their jobs.

Ahmady summarised the grim picture in a tweet Wednesday, predicting depreciating currency, surging inflation and rising food prices.

 

link  :  https://www.aljazeera.com/economy/2021/8/19/what-will-happen-to-afghanistans-economy-under-taliban-rule

 

 
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