US blocks Taliban access to Afghan central bank assets - Times of India

US blocks Taliban access to Afghan central bank assets – Times of India

The Biden administration has blocked access to Afghan central bank assets in the US to ensure that they are not available to the Taliban, an administration official said on Tuesday.
The action, taken by the treasury department, to cut off the Afghan economy’s financial lifeline will put economic pressure on the Taliban as they seek to keep public services operating. The vast majority of the Afghan central bank’s assets, which include $9.4 billion in gross international reserves, are not currently held in Afghanistan.
The decision was reported earlier by Politico.
As the Afghan government collapsed over the weekend, lawmakers in the US pushed to ensure that financial ties between the countries are severed.
The extent of Afghan holdings at the institution is not clear, though it is common for foreign governments to hold accounts at the New York Fed, both for security reasons and to enable smooth cross-border payments and dollar-based transactions. The New York Fed does not, as a matter of policy, acknowledge or discuss individual account holders, a Fed official said.
It is unlikely that the Taliban would be able to retrieve any Afghan assets stored with the Fed. When current events affect the status of accounts, the New York Fed and the state department determine who can have access based on a compliance manual the central bank branch disclosed several years ago. Likewise, under the Federal Reserve Act, the secretary of state must recognise individual representatives of foreign account holders.
Separately on Tuesday, a group of 18 lawmakers sent a letter to treasury secretary Janet Yellen, urging her to intervene in the scheduled release of $650 billion in International Monetary Fund emergency reserves this month. The allocation, of so-called special drawing rights, would potentially give Afghanistan and the Taliban access to $450 million.
It is not clear what Yellen could do at this point to intervene, and it is up to the IMF to determine how a country is recognised.
The acting governor of Afghanistan’s central bank, Ajmal Ahmady, said on Monday that he had received a call on Friday saying it would get no further shipments of US dollars. The central bank supplied less currency to the markets on Saturday, a move that “further increased panic”, he said.
The treasury department declined to comment on the letter to Yellen and the cancelled shipments.

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