Wednesday September 15, 2021
Insiders fear violence
Afghan banks run out of money
Since the Taliban came to power in Afghanistan, long queues have regularly formed in front of the banks. People are trying to get their savings, but insiders warn that cash and dollars are now in short supply. Failure to pay US payments could lead to a collapse.
The Afghan banks are running out of dollars. They could soon be forced to close their doors to customers if the new Taliban government doesn’t release money soon, said three people familiar with the matter. “We only have the liquidity for a few days,” said one of these people, who wanted to remain anonymous. “If the government does not react immediately to the situation, there will be demonstrations and violence.”
The lack of cash is endangering the country’s already ailing economy. It has so far been largely dependent on hundreds of millions of dollars that were paid by the US to the central bank in Kabul and then passed through the banks to the Afghans. A month after the Taliban captured the capital, bankers fear that fewer dollars will drive up food and electricity costs. This also makes it more difficult to finance imports.
Although the cash shortage has persisted for weeks, banks have repeatedly expressed concern to the new government and the central bank over the past few days, two people familiar with the matter said. With the onslaught of savings, finance houses have already curtailed their offers and imposed weekly withdrawal limits of $ 200. Long queues regularly form in front of the branches as people try to get money.
Liquidity crisis brings the flow of goods to a standstill
The central bank’s incumbent governor said on its website that the situation was stable. “The banks are completely safe,” he said. Commercial banks usually keep ten percent of their capital in the form of cash – in Afghanistan, however, it is 50 percent. However, the central bank urged citizens to use the local currency. She also posted a photo of cash allegedly among the millions of dollars and gold bars seized from former government officials.
Foreign observers meanwhile paint a gloomy picture. “The liquidity crisis has disrupted supply chains and stalled the flow of money and goods,” said a report that warns that the economy could shrink by a third if the banking crisis were handled incorrectly. “Many companies are unable to pay their suppliers.” Non-governmental organizations, on the other hand, are unable to pay their employees’ salaries.
According to Ajmal Ahmadi, the former governor of the central bank who fled abroad, almost the entire $ 10 billion in currency reserves have been stored abroad. The Russian embassy in Kabul announced that the ousted President Ashraf Ghani had fled the country with four cars and a helicopter full of cash and had to leave some of the money behind because it no longer fit in the trunk, according to the RIA news agency reported. Ghani denies taking any money.