The Taliban finds out it won't be so easy to access Afghanistan's $9B in reserves

Where are the reserves the Taliban is after?

After fleeing the country as the Taliban took over, former Central Bank of Afghanistan leader Ajmal Ahmady took to twitter to write about where the nation's $9 billion in reserves are located.

His answer is that they're in three places:

(1) Federal Reserve = $7.0 - U.S. bills/bonds: $3.1 - WB RAMP assets: $2.4 - Gold: $1.2 - Cash accounts: $0.3

(2) International accounts = 1.3

(3) BIS = $0.7

He notes that Afghanistan was set to receive $340m in IMF special drawing rights on August 23 but that will now almost-certainly be halted.

In terms of cash, it appears it's all gone.

For some perspective, $9.4 billion is nearly half of Afghanistan's GDP.

Given Afghanistan's large current account deficit, DAB was reliant on obtaining physical shipments of cash every few weeks." Ahmady wrote. "The amount of such cash remaining is close to zero due a stoppage of shipments as the security situation deteriorated, especially during the last few days."

He estimates that the Taliban will be able to access 0.1-0.2% of Afghanistan's reserves, or $9-$18 million.

He also notes that local Afghanis won't be able to withdraw any dollars they have in the bank, because the banks are all out of dollars.

Ahmady lays out a clear case for what comes next:

So while the US military support was undoubtedly critical to Afghanistan, we're about to find out just how critical fiscal support was as well.

"Taliban won militarily - but now have to govern. It is not easy," Ahmady wrote.

The plight of the 38 million people in Afghanistan is about to get a lot worse.

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August 19, 2021 at 01:03PM

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