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Afghan central bank drained dollar stockpile before Kabul fell

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The Afghan central bank ran down most of its U.S. dollar cash reserves in the weeks before the Taliban took control of the country, according to an assessment prepared for Afghanistan’s international donors, exacerbating the current economic crisis.

The confidential, two-page brief, written early this month by senior international economic officials for institutions including the World Bank and International Monetary Fund, said the country’s severe cash shortage began before the Islamic Emirate of Afghanistan (IEA) took control of Kabul, Reuters reported.

It criticised how the central bank’s former leadership handled the crisis in the months before the IEA’s conquest, including decisions to auction unusually large amounts of U.S. dollars and move money from Kabul to provincial branches.

“FX (foreign exchange) reserves in CB’s (central bank) vaults in Kabul have depleted, the CB cannot meet … cash requests,” the report, seen by Reuters, said.

“The biggest source of the problem is the mismanagement at the central bank prior to the Taliban (IEA) takeover,” it added.

Shah Mehrabi, chairman of the central bank’s audit committee who helped oversee the bank before the IEA took over and is still in his post, defended the central bank’s actions, saying it was trying to prevent a run on the local Afghani currency.

The extent of the cash shortage can be seen on the streets of Afghan cities, where people have been queuing for hours to withdraw dollar savings amid strict limits on how much they can take out.

Even before the shock of the Western-backed government’s collapse, the economy was struggling, but the return of the IEA and abrupt end of billions of dollars in foreign aid has left it in deep crisis.

Prices for staples like flour have spiralled while work has dried up, leaving millions facing hunger as winter approaches.

Aid dries up

Under the previous government, the central bank relied on cash shipments of $249 million, delivered roughly every three months in boxes of bound $100 notes and stored in the vaults of the central bank and presidential palace, according to three people with direct knowledge of the matter.

That money has dried up as foreign powers shy away from dealing directly with the IEA.

The central bank, which plays a key role in Afghanistan because it distributes aid from countries like the United States, said on Wednesday it had finalised a plan to meet the country’s foreign currency needs. It gave no details.

The hard currency crunch is making it difficult for the IEA to meet basic needs, including paying for power or dispersing salaries to government employees, many of whom have not been paid in months.

Afghanistan’s roughly $9 billion of offshore reserves were frozen as soon as the IEA captured Kabul, leaving the central bank with just the cash in its vaults.

According to the report, the central bank auctioned off $1.5 billion between June 1 and August 15 to local foreign exchange dealers, which it said was “strikingly high”.

“By August 15, the Central Bank had an outstanding liability of $700 million and 50 billion Afghanis ($569 million) towards the commercial banks,” it said, adding that this had been a major factor in emptying its coffers.

Afghan central bank official Mehrabi said, however, that although almost $1.5 billion of auctions had been announced, the actual amount sold was $714 million.

He said the central bank had “continued its foreign exchange auction to reduce the depreciation and inflation.”

Money missing?

The report also questioned a decision by the central bank to shift some of its reserves to provincial branches, putting it at risk as IEA forces made advances across the country from late 2020 in the runup to their victory.

It said around $202 million was kept in these branches at the end of 2020, compared with $12.9 million in 2019, and that the cash was not moved as provinces started to fall to the IEA.

“Some money is reportedly lost (stolen) from ‘some’ of the provincial branches,” the report said, without specifying how much.

Mehrabi said the central bank was investigating money “stolen” from three of its branches, although not by the IEA. He gave no further details.

Former central bank governor Ajmal Ahmady, who left the country the day after Kabul fell, did not respond to emails and other messages requesting comment on his and the bank’s actions in the months before the IEA returned to power.

Ahmady has said on Twitter in recent weeks that he did his best to manage the situation, and blamed any cash shortfall on the freezing of central bank assets abroad.

In his statements, he also said the central bank had managed the economy well prior to the fall of Kabul and that he felt bad about leaving staff behind but feared for his safety. He has said no money was stolen from any reserve account.

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TAPI project sees rapid progress in Afghanistan

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Afghanistan’s Islamic Emirate says work on the TAPI Pipeline is advancing steadily, with major infrastructure activities continuing at a rapid pace across the country.

Zabihullah Mujahid said around 130 kilometers of the route have been leveled so far, while 91 kilometers of pipeline have already been installed.

He said the total distance from the border of Turkmenistan to the Herat Industrial Park covers 153 kilometers, where the pipeline will extend.

According to Mujahid, completion of the project is expected to bring major economic transformation to Herat, with thousands of factories projected to become operational.

The 1,814-kilometer pipeline, including 816 kilometers passing through Afghanistan to Pakistan, is designed to transport 33 billion cubic meters of gas annually. Work on the Afghan section began in September 2024, with 52 percent completed so far, while the Herat section is expected to be finished by the end of 2026.

Once operational, the project is expected to provide Afghanistan with millions of dollars in annual transit revenue, while the country will also receive 500 million cubic meters of gas initially, increasing to 1 billion and later 1.5 billion cubic meters in future phases.

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Ashura observed across Afghanistan with calls for unity and justice

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Afghanistan marked the 10th of Muharram, the Day of Ashura, with religious ceremonies held across Kabul and several other provinces, as thousands of mourners gathered to commemorate the martyrdom of Imam Hussain (RA), the grandson of Prophet Muhammad (PBUH).

Ashura commemorates one of the most significant events in Islamic history, when Imam Hussain (RA) and 72 of his loyal companions were martyred in the Battle of Karbala. The occasion is observed annually across the Muslim world through prayers, mourning ceremonies, and acts of charity.

Former Afghan President Hamid Karzai described Ashura as an opportunity to strengthen national unity and solidarity. In a message marking the occasion, he expressed hope that Afghans would draw inspiration from the spiritual significance of Ashura and work together for the

progress, prosperity, and development of a united Afghanistan enriched by knowledge and education.

Religious scholars also emphasized that the uprising of Imam Hussain (RA) continues to symbolize justice, sacrifice, unity, and resistance against oppression, carrying a timeless message for Muslim societies and humanity as a whole.

Meanwhile, officials of the Islamic Emirate attending Ashura commemorations said all necessary measures had been taken to ensure religious ceremonies were held peacefully and securely across the country.

The Ministry of Interior also confirmed that extensive security measures had been implemented for Ashura, with large numbers of security personnel deployed to protect mourners, mosques, Hussainiyas, and other venues hosting commemorative events.

In Kabul and several other provinces, Ashura ceremonies concluded peacefully as worshippers observed the occasion through prayers, religious gatherings, and the distribution of food and charity in memory of the martyrs of Karbala.

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Afghanistan records historic 95% drop in opium production: UNODC

Afghan authorities maintain that the cultivation, production, and trafficking of narcotics in the country have been reduced to near zero under current enforcement measures.

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The United Nations Office on Drugs and Crime (UNODC) says Afghanistan’s anti-narcotics campaign has achieved a “historic record” following a 95% reduction in opium poppy cultivation over the past three years, while warning that the growing production of synthetic drugs is emerging as a major global concern.

In an interview with Ariana News, the UNODC representative in Afghanistan said the narcotics situation in the country has changed significantly since the 2022 ban on the cultivation and production of illicit drugs, with sustained reductions recorded between 2023 and 2025.

UNODC representative Polleak Ok Serei described the development as unprecedented, saying the 95% reduction in poppy cultivation represents a major global milestone.

“In the past three years — 2023, 2024, and 2025 — the 95% reduction in opium poppy cultivation has been maintained. This is a remarkable achievement and a truly historic record. Previous efforts lasted only one year,” he said. “This is not only important for Afghanistan, but for the entire world, as Afghanistan previously produced around 80% of the global illicit opium supply.”

He added that following these developments, UNODC has adjusted its programs, shifting greater focus toward alternative livelihoods for farmers who previously depended on poppy cultivation.

According to him, while these efforts have shown progress, they remain insufficient due to Afghanistan’s broader humanitarian, economic, and environmental challenges.

UNODC also warned that the shift from traditional narcotics to synthetic drugs is creating new challenges for health systems, requiring updated medical responses and treatment approaches.

“We have had to adapt our activities accordingly,” the UN official said. “We are focusing heavily on alternative livelihoods for farmers, because those previously dependent on this production need new sources of income. We also had to reassess health interventions, particularly due to the shift from traditional drugs to synthetic drugs, which requires different medical approaches.”

The UN agency stressed that drug trafficking is a transnational issue requiring coordinated international cooperation among law enforcement and judicial authorities.

“Drug trafficking is a cross-border phenomenon. There are traffickers operating not only inside Afghanistan but also outside the country. Therefore, international cooperation between police and judicial authorities is essential,” he said.

UNODC called on neighboring countries and the international community to increase cooperation and investment in long-term solutions, including rural livelihoods, addiction treatment, and dismantling trafficking networks.

The statement comes as UNODC’s World Drug Report 2026 highlights rapid changes in global drug markets, driven by technology, instability, and the emergence of new synthetic substances.

According to the report, global drug production and trafficking patterns are shifting significantly, particularly in the opioid market. While Afghanistan’s opium production has sharply declined since 2022, production increases in countries such as Myanmar have not fully offset global supply changes, leading traffickers to increasingly turn toward synthetic opioids such as fentanyl and other highly potent substances.

The report warns that these new synthetic drugs can be significantly more powerful and deadly than traditional narcotics, posing serious risks to public health and security worldwide.

UNODC also noted that rising global demand for drugs such as methamphetamine and cocaine is expanding trafficking routes into new regions, including Africa and Asia, further complicating international control efforts.

Meanwhile, Afghan authorities maintain that the cultivation, production, and trafficking of narcotics in the country have been reduced to near zero under current enforcement measures.

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