President Joe Biden is expected to issue an executive order to move some $7 billion of the Afghan central bank’s assets frozen in the U.S. banking system to fund humanitarian relief in Afghanistan and compensate victims of the Sept. 11, 2001, attacks, according to a U.S. official familiar with the decision.
The order will require U.S. financial institutions to facilitate access to $3.5 billion of assets for the Afghan relief and basic needs. The other $3.5 billion would remain in the United States and be used to fund ongoing litigation by U.S. victims of terrorism, the official said. The official spoke on the condition of anonymity because the decision had not been formally announced.
International funding to Afghanistan was suspended and billions of dollars of the country’s assets abroad, mostly in the United States, were frozen after the Taliban took control of the country in mid-August.
The country’s long-troubled economy has been in a tailspin since the Taliban takeover. Nearly 80% of Afghanistan’s previous government’s budget came from the international community. That money, now cut off, financed hospitals, schools, factories and government ministries. Desperation for such basic necessities has been further exacerbated by the COVID-19 pandemic as well as health care shortages, drought and malnutrition.
Earlier, Complicating the response, Taliban leaders have banned the use of foreign currency in a country where US dollars were common. The United Nations has flown in shipments of $100 bills, but the central bank has not converted them, leaving the world body sitting on about $135 million in cash that it cannot use, a UN official said last week.
Those funds are held in Kabul in the vaults of AIB, the official said, the private bank that would play a role in the new cash swap system.
The security of the cash flights and limits on how much can be delivered are key reasons for starting the new exchange facility, the note said. — Reuters
