“No one has money,” a current employee of Afghanistan’s central bank told CNN. The employee, who spoke anonymously for fears for his safety, said many families do not have enough money for their daily expenses and that some payrolls have been stopped.
Banks in Afghanistan remain closed, days after the Taliban ordered them to reopen services and other services, because they have virtually run out of cash, the central bank source said.
“You have a pile of letters that is about to fall,” a person familiar with the situation in the Afghan economy told CNN. “As soon as you open the banks, you will be exposed to how fragile the system is.”
“Existential Flash Point”
Similarly, the Afghan banking industry warns of a total collapse.
“Afghanistan and its banking sector are at an ‘existential flash’ where the banking sector is about to collapse,” reads an August 23 note sent by the Chamber of Commerce Afghan-American. The note was written by a banking and financial working group made up of major Afghan commercial banks, customers and investors.
The central bank of Afghanistan, the basis of its financial system, seems to be in disarray.
Many current Afghan central bank employees have not been allowed to return to office since the Taliban took power, the Afghan central bank source told CNN.
“My co-workers are worried about their unclear fate,” the source said.
The note from the Afghan-American Chamber of Commerce indicated that, at least as of Aug. 23, the central bank’s management “refused to respond to any communication” from the banking industry. Central bank cash requests were not met, according to the note.
The Afghan banking group said it decided to close all banks across the nation on August 15 and that it has not reopened due to fears of a “management” of customers by deposits.
Little is known about the new head of the central bank. He seems to be a loyalist without the kind of resume or training that would inspire confidence in the Afghan banking system.
Cut lines of life
Part of the problem is that the Taliban-ruled Afghanistan has become an outcast almost overnight.
The Biden administration quickly blocked the Taliban’s access to the billions of dollars the central bank had in the United States.
Cash shortages are a nightmare for a country that has a very large trade deficit like Afghanistan does.
Citing a “rapid depletion of cash,” the Afghan banking group called on the U.S. government to immediately grant access to central bank assets.
“Without access soon, we fear that the entire Afghan economy and the banking sector will fail and the liquidation of assets will be ordered,” the note said, “and public frustration and possible violence will soon occur as citizens [will] not being able to buy important food and services “.
Growing risk of a humanitarian disaster
All this will be an immediate test of government for the Taliban and could create an opening for ISIS and other groups who want to further destabilize the region.
“The Taliban came to not understand what they would inherit here,” the economic source familiar with Afghanistan told CNN.
There are now growing fears that the situation in Afghanistan will soon become a humanitarian disaster.
“Humanitarian assistance should not only remain, but should increase over the next few days and months,” he said. “We are not waiting for another crisis to come.”
Consider that nearly half (47%) of households in Afghanistan lived in poverty, according to the World Bank.
“Very quickly, this will go very wrong,” the economic source familiar with Afghanistan told CNN, adding that the humanitarian crisis is “inevitable” on the current path.
The Afghan central bank employee expressed concern about what awaits us.
“I have many wishes: they will all die,” the employee said. “We are moving towards a hopeless future.”