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USIP reports Afghanistan’s banking system dysfunctional
The United States Institute of Peace (USIP) has said in a new report that Afghanistan’s banking system remains largely dysfunctional.
This report evaluated the Afghan banking system as inefficient. It said that the lack of access to Afghanistan’s foreign exchange reserves and the obstacles in the way of printing banknotes add to these problems.
USIP has warned that the decrease in cash and humanitarian aid will have a destructive effect on the economy and financial system of Afghanistan.
The report highlights systemic challenges within Afghanistan’s banking sector, including a backlog of bad loans and limited depositor access to funds due to withdrawal restrictions imposed by Da Afghanistan Bank (DAB).
“Afghanistan’s precarious economy is facing a new set of multidimensional risks as humanitarian aid — delivered in massive shipments of U.S. cash dollars — shrinks rapidly amid competing demands from other crises around the world. The dollar inflows, moved under U.N. auspices, have helped stabilize the Afghan economy, cover its mammoth trade deficit, and inject monetary liquidity into commerce,” the report said.
“With much smaller cash infusions, in line with a general reduction in aid, the suffering of Afghanistan’s poverty-stricken population is likely to increase,” USIP has warned.
The author of this report has suggested that, contrary to the confrontation between the countries of the world and the Islamic Emirate on the issue of women’s rights, other countries and international organizations can play a supporting role in facilitating the printing of more Afghan banknotes and allow the use of investment income from the Afghanistan Fund in Switzerland to stabilize the macroeconomics.
Da Afghanistan Bank (DAB) has not yet reacted to this report, but it has already emphasized that it will continue its efforts by implementing reasonable monetary policies that lead to maintaining the value of the afghani against other currencies.
DAB also stressed it will pay special attention to the strength of the banking sector and bring reforms and improvements as much as possible in this sector.
The Ministry of Foreign Affairs of the Islamic Emirate of Afghanistan announced on Tuesday the release of American citizen Dennis Coyle from prison.
According to the ministry, Coyle’s mother had written to the leader of the Islamic Emirate demanding amnesty and the release of her son on the occasion of Eid. The Supreme Court considered time served sufficient and decided to release him.
The Ministry of Foreign Affairs stated that this action was carried out on the basis of humanitarianism and good faith, and it believes that such measures can strengthen trust between countries. The ministry also expressed hope that both countries, in the future, can find solutions to remaining issues through mutual understanding and constructive dialogue.
The Islamic Emirate also expressed appreciation for the cooperation of the United Arab Emirates in this matter.
Separately, for Coyle’s release, an American delegation, including Zalmay Khalilzad, former U.S. Special Representative for Afghanistan, met on Tuesday with Amir Khan Muttaqi, the Foreign Minister of the Islamic Emirate.
The meeting was also attended by Saif Mohammed Al-Ketbi, Ambassador of the UAE in Kabul, and a member of the prisoner’s family.
According to the Ministry of Foreign Affairs, Muttaqi stated that the Islamic Emirate has not detained any citizen of any country to achieve political objectives; rather, detentions were the result of legal violations, and individuals were released after completing judicial procedures.
At the meeting, Khalilzad praised the action of the Islamic Emirate and emphasized the importance of continuing discussions on all issues between the two countries, expressing hope for further progress in the future.
Muttaqi also stressed that Kabul and the UAE should provide standard consular services to their citizens, and that the Afghan government is fully prepared in this regard.
He thanked Sheikh Mohamed bin Zayed Al Nahyan, President of the UAE, for their constructive role in facilitating the release of the prisoner and referred to the UAE as a close friend of Afghanistan.
Earlier, Muttaqi had also praised the role of the State of Qatar in facilitating information exchange between the Islamic Emirate and the prisoner’s family.
Additionally, the UAE ambassador expressed his country’s readiness to play a role in humanitarian institutions and called such developments beneficial for everyone.
The United Kingdom has announced an additional £3 million (AFN 257 million) in humanitarian assistance to Afghanistan, aimed at supporting people affected by natural disasters and other shocks.
Richard Lindsay, in a post on X, said the funding will be used to provide essential nutrition supplies and related support to vulnerable populations.
The new allocation brings the UK’s total bilateral assistance to Afghanistan for the current financial year to £154 million (AFN 13.18 billion).
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