US freezes nearly $9.5bn of Afghan reserves to block Taliban access to funds

Published August 18, 2021
Afghans wait for hours to try to withdraw money, in front of Kabul Bank, in Kabul, Afghanistan on August 15. — AP/File
Afghans wait for hours to try to withdraw money, in front of Kabul Bank, in Kabul, Afghanistan on August 15. — AP/File

The Biden administration froze about $9.5 billion of the Afghan government’s reserves in US banks on Sunday after the Taliban seized Kabul, according to US media reports.

The undeclared action was first reported by The Washington Post on Tuesday.

The Post reported that US Treasury Secretary Janet Yellen and personnel at the Treasury's Office of Foreign Assets Control had decided to freeze the accounts.

"Any central bank assets the Afghan government have in the United States will not be made available to the Taliban," an administration official told the newspaper in a statement.

According to the report, the US State Department was consulted before the action as was the White House, adding that the Biden administration was contemplating other actions as well to pressure the Taliban.

It pointed out that the Biden administration did not need new authority to freeze the reserves because the Taliban were already under sanctions from an executive order approved after the September 11, 2001, terrorist attacks.

Washington also stopped shipments of cash to Kabul as part of an effort to prevent a Taliban-led government from accessing money, according to a Bloomberg report.

Ajmal Ahmady, acting head of Da Afghanistan Bank (DAB) — the nation’s central bank — tweeted earlier this week that he learned on Friday that shipments of dollars would stop as Washington would not allow the Taliban to access the funds.

According to Bloomberg, the DAB has $9.5bn in assets, a sizeable portion of which is in accounts with the New York Federal Reserve and US-based financial institutions.

The restrictions followed in the wake of the Taliban's nearly complete takeover of Afghanistan.

Taliban co-founder Abdul Ghani Baradar arrived in the country on Tuesday for the first time in more than 10 years. He travelled to Kandahar, the birthplace of the Taliban and the second-largest city in Afghanistan, which was overtaken by the insurgent group last week.

Afghanistan’s currency — Afghani — has faced record losses since Monday, the first working day since the Taliban takeover this weekend.

The Afghani fell as much as 4.6 per cent on Tuesday to 86.0625 per dollar, the fourth day of decline, according to data compiled by Bloomberg.

Opinion

Editorial

Out of control
Updated 19 Feb, 2025

Out of control

AS bodies continue to fall in Kurram despite a state-sanctioned ceasefire, one wonders how long local militants’...
Hollow words
19 Feb, 2025

Hollow words

IT is not uncommon for politicians to resort to the use of hyperbole in order to boost their public standing. ...
Migration matters
19 Feb, 2025

Migration matters

THE grass, it seems, did appear greener on the other side to millions of people as evidenced by the latest UN ...
Cholistan project
Updated 18 Feb, 2025

Cholistan project

GPI goals align with Pakistan's broader economic aims but the manner in which the initiative was launched raises questions.
Right to know
18 Feb, 2025

Right to know

IT is an unfortunate paradox that while on paper Pakistan has some of the most impressive right to information laws,...
Dam dispute
18 Feb, 2025

Dam dispute

THE situation in Chilas needs attention and a fair-minded approach so that it can be resolved amicably. Diamer ...