Afghanistan

In Herat, a key axis of trade in western Afghanistan, a wave of bankruptcies is feared among traders, who express their “hopelessness” in the face of the deterioration of the country’s economic situation after the return of the Taliban to power in the middle of August, Market Research Telecast reported. “At the beginning, when the Taliban arrived, people were very happy, because we perceived that with them security was returning,” says Faghir Ahmad, a trader and importer of food products from Iran, very close to Herat.

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The Biden administration has no plans to release billions in Afghan gold, investments and foreign currency reserves parked in the United States that it froze after the Taliban's takeover, despite pressure from humanitarian groups and others who say the cost may be the collapse of Afghanistan's economy, Reuters reported. Much of the Afghan central bank's $10 billion in assets are parked overseas, where they are considered a key instrument for the West to pressure the Taliban to respect women's rights and the rule of law.
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The United States will continue to be a "very generous" donor of humanitarian aid to the Afghan people and will aim to prevent any of its assistance from passing through Taliban coffers, State Department spokesman Ned Price said on Friday, Reuters reported. "We can maintain a humanitarian commitment to ... the Afghan people in ways that does not have any funding or assistance pass through the coffers of a central government," he told reporters.
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Afghanistan's banks, critical to the country's recovery from crisis, are facing an uncertain future say its bankers, with doubts over everything from liquidity to employment of female staff after the Taliban swept to power, Reuters reported. Banks were expected to reopen imminently, a Taliban spokesman said on Tuesday, after they were closed for some ten days and the financial system ground to a halt as the Western-backed government collapsed amid the pullout of U.S. and allied troops.
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The World Bank said on Tuesday that it had halted disbursements of aid money to Afghanistan as it assesses how the Taliban plan to rule the country, the New York Times reported. A World Bank spokesperson said that the international development organization is “deeply concerned” about the situation in Afghanistan, particularly the impact that the new leadership will have on women in the country. The bank plans to monitor how the leadership transition proceeds and consult with the international community.
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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, Bloomberg News reported. 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.
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The International Monetary Fund said it will prevent Afghanistan from gaining access to some $450 million in aid in the wake of the Taliban's takeover the country, after the U.S. Treasury Department moved to block the funds, Politico reported. The IMF, with U.S. backing, is issuing billions of dollars worth of new “special drawing rights,” a reserve asset that can be converted to government-backed money, to aid poorer countries. A portion of those assets was scheduled to be allocated to Afghanistan next week, an event that generated urgent pushback from Republican lawmakers.
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U.S. Treasury Secretary Janet Yellen should intervene at the International Monetary Fund to prevent Taliban-led Afghanistan from being able to use almost $500 million in reserves, Republican House members said, Bloomberg News reported. The group of 18 lawmakers, including Arkansas’s French Hill, wrote to Yellen on Tuesday in a letter obtained by Bloomberg News, asking Yellen to take action at the fund and respond to their request by Thursday afternoon.
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The Taliban strengthened control of the Afghan capital Tuesday as many stores reopened, traffic police returned to their posts and a senior official from the Islamist movement arrived for contacts with political leaders affiliated with the fallen Afghan republic, the Wall Street Journal reported. Thousands of Afghans employed by Western embassies in Kabul remained stranded in the city, unable to enter the airport for evacuation flights. Military flights resumed as the U.S.
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Afghanistan is cracking down on tax evasion to repair its finances as the country’s economy struggles with renewed violence and the withdrawal of the huge coalition presence that fed business for years, The Wall Street Journal reported. The departure of most foreign troops two years ago allowed the Taliban to take advantage of the security vacuum and escalate attacks on the government, hurting consumer and business confidence. Double-digit economic growth rates collapsed to almost zero a year after the withdrawal.
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