AFGHANISTAN’S BANKING SYSTEM ON VERGE OF COLLAPSE, EXPERTS WARN

Kabul, Afghanistan - A Dire Economic and Humanitarian Crisis Unfolds

The Taliban’s rule over Afghanistan is facing an imminent threat as the country’s banking system teeters on the brink of collapse. Nearly two weeks since the Taliban seized power, Afghan banks remain shuttered, leaving millions without access to cash.

The Central Bank’s Cash Reserve Virtually Empty

The central bank has virtually run out of cash, with many families struggling to make ends meet and paychecks halted. The situation is dire, with experts warning of a severe economic and humanitarian crisis on the horizon.

Afghanistan’s Economy in Crisis

Afghanistan’s economy is heavily reliant on foreign currency and international aid, which has been blocked since Kabul fell. Grants finance 75% of Afghanistan’s public spending, according to the World Bank.

The Banking Industry Sounds the Alarm

The Afghan banking industry is sounding the alarm, warning of an “existential flash point” where the collapse of the banking sector is imminent. A memo sent by the Afghan-American Chamber of Commerce warned that the central bank’s leadership has refused to answer communications from the banking industry and cash requests have not been honored.

The Taliban’s Response

The Taliban has appointed a new acting governor of the central bank, but little is known about his qualifications or experience. The International Monetary Fund and World Bank have both frozen financial support for Afghanistan, exacerbating the crisis.

US Government Blocks Access to Funds

The US government has blocked access to billions of dollars held by the central bank in the United States, further straining the country’s economy. Without immediate access to these funds, experts warn that the entire Afghan economy and banking sector will fail, leading to a humanitarian disaster.

Experts Urge International Community to Act

As the crisis deepens, experts are urging the international community to provide humanitarian assistance and increase aid to Afghanistan. “Humanitarian assistance not only needs to remain, but needs to increase over the next few days and months,” said Ajmal Ahmady, who led the Afghan central bank before fleeing the country.

Consequences of Inaction

The situation poses an immediate governance test for the Taliban and could create an opening for ISIS and other groups seeking to destabilize the region. The World Bank has warned of economic hardship, cash shortages, inflation, and a surge of refugees leaving the country.

A Dire Prediction

As the crisis deepens, one Afghan central bank employee’s dire prediction sums up the mood: “I have many wishes – all of them are going to die. We are moving towards a hopeless future.”

Take Action Now

The stakes are high, with nearly half of households in Afghanistan living in poverty. Experts warn that a humanitarian crisis is inevitable if action is not taken soon. The international community must act swiftly to provide aid and assistance to prevent the collapse of Afghanistan’s banking system and mitigate the consequences of this devastating crisis.