Central bank governor says international reserves have not been compromised

Ajmal Ahmady, Afghanistan’s central bank governor and former minister of industry and commerce, posted a series of tweets on Wednesday stating he wanted to “clarify the location of DAB (Central Bank of Afghanistan) international reserves.” 

He said that DAB reserves were approximately $9.0 billion as of last week but that “this does not mean that DAB held $9.0 billion physically in our vault.”

He said as per international standards, most assets are held in safe, liquid assets such as Treasuries and gold.

He said that DAB was set to receive approximately $340 million on August 23rd from the International Monetary Fund.

“Not sure if that allocation will now proceed with respect to Afghanistan,” he said. 

Given Afghanistan’s large current account deficit, DAB was reliant on obtaining physical shipments of cash every few weeks, he said.

“The amount of such cash remaining is close to zero due to a stoppage of shipments as the security situation deteriorated, especially during the last few days,” he said. 

“On Friday morning, I received a call notifying me that there would be no further USD (US Dollar) shipments,” Ahmady said, adding they were expecting one on Sunday, the day the Taliban took control of Kabul, but that this shipment did not arrive. 

Ahmady said that on Saturday, banks placed very large USD bids as customer withdrawals accelerated.

“For the first time, I therefore had to limit USD access to both banks and dollar auctions to conserve remaining DAB dollars.

“We also put out a circular placing maximum withdrawal limits per customer,” he said. 

He assured Afghans that in no way were Afghanistan’s international reserves ever compromised.

“We had a program with both the IMF and Treasury that monitored assets. No money was stolen from any reserve account,” he said.

However, he stated that given that the Taliban are still on international sanction lists, it is expected that such assets will be frozen and not accessible to Taliban.

“I believe local banks have told customers that they cannot return their dollars – because DAB has not supplied banks with dollars.

“This is true. Not because funds have been stolen or being held in a vault, but because all dollars are in international accounts that have been frozen,” he said. 

“Taliban should note this was in no way the decision of DAB or its professional staff. It is a direct result of the US sanctions policy implemented by OFAC (the American Office of Foreign Assets Control),” he said. 

In conclusion, Ahmady suggested the Taliban implement capital controls and limit dollar access.